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The Gartley Pattern is the original harmonic pattern, first described by H.M. Gartley in 1935 and later refined with Fibonacci ratios by Scott Carney. It's a five-point pattern (XABCD) where price retraces within the XA leg, forming a specific geometric shape.
In a bullish Gartley, price declines from X to A, bounces to B, drops to C, then makes a final decline to D — where D must be at the 78.6% retracement of XA. This is the reversal point. The bearish version is the mirror image.
The Gartley is the most commonly traded harmonic pattern because its 78.6% completion at D offers excellent risk:reward — the stop is tight (below X) and the targets are substantial.
The Gartley captures a deep but controlled retracement. The XA move establishes the range. The ABCD structure within it creates a final test of support/resistance at the 78.6% level.
Point D works as a reversal because it represents the last Fibonacci level before full retracement. Traders who bought at A are still in profit, so there's no forced selling. But the correction has been deep enough to shake out weak hands.
The 78.6% level is critical — it's the square root of 61.8%, giving it mathematical significance in Fibonacci analysis. When price reaches this level with the proper ABCD internal structure, the reversal probability is highest.
Enter at point D (78.6% of XA) with a reversal candle for confirmation. Limit orders at the exact level work when ratios are precise.
Below point X (bullish) or above point X (bearish). If D exceeds X, the Gartley is invalid.
T1: 38.2% retracement of AD. T2: 61.8% of AD. T3: Point A (full reversal of the CD leg).
Typically 1:2 to 1:3. The tight stop at X and substantial targets make Gartleys attractive.
The Gartley is the first harmonic most traders learn and remains the most reliable. Its precise Fibonacci requirements filter out noise and identify high-probability reversal zones.
The Gartley's edge is its tight invalidation at X. If you're wrong, you lose small. If you're right, the reversal from 78.6% gives you a big swing.
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