Gartley Pattern Trading: The Complete 222 Pattern Guide

The Gartley pattern is the grandfather of all harmonic patterns and remains one of the most reliable reversal formations in technical analysis. Named after H.M. Gartley who introduced it on page 222 of his 1935 book, this pattern has stood the test of time. In this comprehensive guide, we will teach you everything you need to know to trade the Gartley pattern successfully.

What is the Gartley Pattern?

The Gartley pattern is a five-point harmonic pattern that identifies potential reversal zones using Fibonacci retracement and extension levels. It forms an M-shape in bullish formations and a W-shape in bearish formations. The pattern is characterized by its 78.6% retracement of the initial XA leg at point D, which is where traders look for reversal opportunities.

The Gartley Fibonacci Ratios

The precise ratios are what separate a valid Gartley from random price action:

Point B Requirements

• Must retrace exactly 61.8% of the XA leg
• This is the primary qualifying ratio for the pattern
• Some tolerance is allowed (60-62%), but 61.8% is ideal

Point C Requirements

• Must retrace between 38.2% and 88.6% of the AB leg
• The 61.8% or 78.6% levels are most common
• Point C cannot go beyond point A

Point D Requirements

• Must complete at the 78.6% retracement of XA
• The BC extension should project to 127.2% - 161.8%
• This creates the Potential Reversal Zone (PRZ)

Bullish vs Bearish Gartley

Bullish Gartley

The bullish Gartley forms an M-shape:

• XA leg moves up from a swing low
• Point D forms above point X
• You enter long at point D
• Expect price to rally toward point A

Bearish Gartley

The bearish Gartley forms a W-shape:

• XA leg moves down from a swing high
• Point D forms below point X
• You enter short at point D
• Expect price to decline toward point A

The Potential Reversal Zone (PRZ)

The PRZ at point D is where multiple Fibonacci levels converge:

• 78.6% XA retracement: The primary level
• 127.2% - 161.8% BC extension: Secondary confirmation
• AB=CD completion: Optional but adds confidence

When these levels align within a tight price range, the PRZ has the highest probability of producing a reversal.

Entry Strategies

Aggressive Entry

Enter as soon as price reaches the PRZ at point D:

• Advantage: Best possible entry price
• Risk: Pattern could fail and continue through D
• Best for: Experienced traders with strict stops

Conservative Entry

Wait for confirmation before entering:

• Look for reversal candlestick patterns at D
• Wait for price to move 1-2% in the expected direction
• Advantage: Higher probability of success
• Risk: Worse entry price, smaller reward

Scaled Entry

Enter in parts across the PRZ:

• Enter 1/3 position at the beginning of the PRZ
• Enter 1/3 at the 78.6% level
• Enter 1/3 at the edge of the PRZ
• Advantage: Averages into the best price

Stop Loss Placement

Proper stop placement is critical for the Gartley:

• Primary stop: Just beyond point X. The pattern is invalid if price exceeds X
• Distance: Calculate position size based on X-to-D distance
• Alternative: Tighter stop just beyond the PRZ for aggressive traders

Profit Targets

Use these Fibonacci-based targets:

• Target 1 (T1): 38.2% retracement of AD - take 1/3 profit
• Target 2 (T2): 61.8% retracement of AD - take 1/3 profit
• Target 3 (T3): Point A level - take remaining profit
• Extended: 127.2% AD extension for trending markets

Pattern Validation Checklist

Before trading a Gartley, verify:

• Point B is at 61.8% retracement of XA
• Point C is between 38.2% and 88.6% of AB
• Point C does not exceed point A
• Point D is at 78.6% retracement of XA
• BC extension reaches 127.2% to 161.8%
• The pattern is clearly visible without forcing

Common Mistakes

Avoid these Gartley trading errors:

• Wrong B point: If B is not at 61.8%, it might be a different pattern
• C exceeds A: This invalidates the Gartley structure
• No confirmation: Entering blindly at D without reversal signals
• Moving stops: If price exceeds X, the pattern has failed
• Ignoring context: Trading against the larger trend reduces success

Gartley vs Other Harmonic Patterns

How the Gartley differs from similar patterns:

• vs Bat: Bat has B at 38.2-50% and D at 88.6% (deeper)
• vs Butterfly: Butterfly has D beyond X (extension vs retracement)
• vs Crab: Crab has much deeper D extension at 161.8% of XA

Combining with Other Analysis

Increase success by adding:

• Support/Resistance: Is point D at a key level?
• RSI: Look for divergence at point D
• Volume: Decreasing volume into D, increasing on reversal
• Trend: Gartleys with the larger trend have higher success

Timeframe Selection

The Gartley works on all timeframes:

• Daily/Weekly: Most reliable, fewer patterns
• 4-Hour: Good balance of reliability and frequency
• 1-Hour: More patterns, slightly lower reliability
• Lower: More noise, requires quick execution

Summary

The Gartley pattern remains one of the most reliable harmonic formations after nearly a century of use. Key requirements are the 61.8% B point retracement and 78.6% D point completion of the XA leg. Success comes from validating all Fibonacci ratios, waiting for confirmation at point D, setting stops beyond point X, and taking profits at multiple targets. The pattern works best when combined with support/resistance analysis and trades in the direction of the larger trend.

Continue your harmonic education with our guides on the Butterfly pattern, Bat pattern, and our complete harmonic patterns overview.