How to trade with Gartley pattern in gbpjpy pair
gartley pattern Confirmation Conditions
AB= retrace to 0.618 Fibonacci Retracement of XA leg;
BC= minimum 38.2% and maximum 78.6% Fibonacci retracement of AB leg;
CD= Poses a target between 1.27 – 1.618 Fibonacci extensions of the AB leg or an ideal target of 0.786 of XA leg
The point D is the trigger to buy in a bullish Gartley pattern. Notice that the point D is a potential reversal zone. Traders will need a confirmation of an actual reversal in this area. The confirmation may come in the form of a reversal candlestick pattern or the readings of technical indicators.
A Stop Loss may be placed below X for bullish Gartley or according to your risk management rules.
Take Profit
Here are the options for a Take Profit order.
TP1: 23.6%
TP2: 61.8%
TP3 : 100.%
Notice that in real life, patterns you find on charts often don’t fit in the ratios listed above perfectly. As a result, the bigger is the difference between the text book Gartley pattern and the pattern you want to trade, the higher risk of an error should be taken into account.
Here’s how a Gartley pattern looks on the real chart. The point B is at about the 58.8% retracement of XA. The point C is at the 78.6% retracement of AB. The point D is at the 78.6% retracement of the XA. The pattern is not textbook-perfect but it’s close enough.
Conclusion
A correctly identified Gartley pattern offers a trade with a low level of risk. Gartley In many cases, Gartley patterns form near the tops/bottoms of the market and precede a reversal. You can find and trade Gartley patterns on all timeframes.
Disclaimer
Our charts and contents are just for the purpose of analysis, learning and general discussion. Do not consider these as trading tips or investment ideas. Trading in forex market carry risk and is not suitable for every investor. Hence it is important to do your own analysis before making any investment or trading decisions based on your personal circumstances and it is always better to take your own decision.
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