The Gartley Pattern Trading Strategy is a powerful harmonic approach that identifies high-probability reversal zones using precise Fibonacci ratios. First introduced by H.M. Gartley and later refined by Scott Carney, the Gartley pattern is a retracement-based formation that appears within trending markets, offering traders an opportunity to enter at the end of a correction with tight risk and strong reward potential.

This strategy is widely used in forex, stocks, crypto, and futures, especially by pattern traders who favour structure, symmetry, and predictive geometry.

What Is the Gartley Pattern?

The Gartley pattern is a 5-point harmonic retracement structure, labelled as X-A-B-C-D, and forms within a larger trend. It typically signals a trend continuation after a corrective move.

Ideal Fibonacci Structure:

• XA: Impulse leg (initial trend move)
• AB: Retracement of XA (typically 61.8%)
• BC: Retracement of AB (between 38.2% and 88.6%)
• CD: Extension of BC (127.2%–161.8%)
• AD: Overall retracement of XA (78.6%)

When price completes the D point at these ratios, it creates a potential reversal zone (PRZ) for a trade setup.

Why the Gartley Pattern Works

• Based on Fibonacci relationships, which are widely respected in financial markets
• Represents a psychological correction in a larger trend
• Offers tight risk-to-reward with clear structure and defined entry/exit zones
• Helps avoid chasing price and instead trade planned reversals

How to Trade the Gartley Pattern

1. Identify the Structure

Use a harmonic or manual drawing tool to spot:

• Impulse leg XA
• Retracement AB (61.8% of XA)
• Retracement/extension BC
• Completion at point D (78.6% of XA, forming the PRZ)

2. Entry at the PRZ (Point D)

• Look for price action confirmation: pin bar, engulfing candle, RSI divergence
• Use confluence with support/resistance, trendlines, or volume clusters
• Enter long for bullish pattern or short for bearish pattern

3. Stop-Loss Placement

• Just beyond the X point
• Alternatively, a few pips/ticks beyond the PRZ to allow for a small fakeout

4. Profit Targets

• Target 1: 38.2% retracement of AD
• Target 2: 61.8% retracement of AD
• Optional: Trail a stop if trend resumes strongly

Example Setups

Bullish Gartley

• Market trends up (XA)
• Pulls back to 61.8% (AB)
• BC leg forms a higher low
• CD extends and lands near 78.6% of XA
• PRZ forms with bullish candle = long entry

Bearish Gartley

• Market trends down (XA)
• Pulls back up to 61.8% (AB)
• BC forms a lower high
• CD completes near 78.6% XA
• Bearish confirmation = short entry

Best Tools for Trading Gartley Patterns

• Fibonacci Retracement/Extension Tool: For measuring legs accurately
• Harmonic Pattern Scanner (optional): Automates identification
• RSI or MACD: For divergence or momentum confirmation
• Volume Profile: PRZs near low-volume nodes add confluence

Best Timeframes and Markets

• Markets: Forex majors (EUR/USD, GBP/USD), crypto (BTC/ETH), S&P futures, gold
• Timeframes:
  • Intraday: 15M–1H
  • Swing: 4H–Daily

Harmonic patterns form best in liquid, trending markets with clear structure.

Common Mistakes to Avoid

• Forcing patterns: Not all 5-point structures are valid Gartleys—respect the ratios
• Ignoring confirmation: Always wait for price to validate the PRZ
• Placing stops too tight: Allow room beyond the PRZ for natural fluctuations
• Trading against strong trends without support: Use confluence to avoid traps

Conclusion

The Gartley Pattern Trading Strategy provides a precise, repeatable way to enter trend continuations after corrective pullbacks. By mastering the Fibonacci-based structure and combining it with confirmation signals, traders can identify high-probability reversal zones and manage trades with clarity.

To learn harmonic patterns like Gartley, Bat, Butterfly, and Crab—and how to trade them with institutional-level accuracy—enrol in our expert-led Trading Courses at Traders MBA and transform your chart analysis into a structured edge.