If take the previous graph, is recommended you put your stop-loss somewhere below the D point and the X point. If you’re a more conservative trader, is recommended you put your profit target a C or halfway C. Hakan Samuelsson and Oddmund Groette are independent full-time traders and investors who together with their team manage this website. They have 20+ years of trading experience and share their insights here.
Daily Technical and Fundamental Analysis of Global Gold – October 28, 2025
If you know how to backtest with historical data you can develop a portfolio of trading strategies pretty fast. There is no best trading strategy because you need many to smooth returns. The Bat pattern is similar to the Gartley pattern but has more extended retracements of 88.6% instead of 61.8%.
Psychology Behind Each Leg
- This script not only identifies the patterns but also performs backtesting automatically.
- At point D, the pattern completes, and from that level, the price target will be either C or A and 161.8 % from point A.
- The daily chart of TCS given below shows the bearish Gartley pattern.
Over the years, I’ve seen many traders fail with the Gartley pattern due to a few avoidable errors. Understanding these pitfalls is crucial for long-term success. Futures and forex trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones financial security or life style.
- Statistics or past performance is not a guarantee of the future performance of the particular product you are considering.
- You are now looking at the weekly chart of the NZD/USD Forex pair.
- It can produce false signals, leading to potential losses if not used with proper risk management techniques.
How to Trade the Gartley Pattern. I Test If It Really Works!
The Gartley formation is part of the harmonic family of patterns. It is necessary to understand the pros and cons of the Gartley pattern trading as given below. The concept of the Gartley pattern indicator is explained with the help of some examples, as given below. The beauty of the Gartley pattern lies in its clearly defined risk.
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Access agreements that support transparent trading operations. When identified correctly, the Gartley Pattern can provide high-probability trading opportunities. This article describes the Gartley pattern, and at the end of the article we make a backtest.
The pattern looks like an M/W and its swings are designated with the points X, A, B, C, and D. When you open your Gartley trade and you place your stop loss order, you expect the price to move in your favor, right? And if and when it does, you should know how long you expect to stay in the trade.
Access TradingView’s charts, real-time data, and tools, all in one platform. Keep up with market news and trends that may impact price movements and the effectiveness of the Gartley Pattern. Each of these patterns has its own strengths and weaknesses. Identifying the Gartley Pattern requires a good understanding of Fibonacci retracement levels and precise measurements. No matter which Gartley pattern you found, you should always place your profit target and stop-loss.
Gartley pattern analysis is often complemented by indicators such as Fibonacci retracement levels, Relative Strength Index (RSI), and moving averages. These indicators help traders confirm the pattern’s validity and assess market conditions more effectively. These four levels on the chart are the four minimum targets of the bullish Gartley.
The Crab pattern has an even more extended retracement level of 161.8% and is considered one of the most reliable patterns for short-term traders. These ratios help in determining the potential reversal zone, where traders expect a change in price direction. Leverage your pattern trading skills with Opofinance, an ASIC-regulated broker designed for modern traders. The Gartley is often called the “original” harmonic pattern, but it’s part of a larger family. Knowing the key differences helps you correctly identify the structure on your chart. The primary differentiator is the location of point B, which dictates the pattern type and the subsequent PRZ at point D.
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The image what is the gartley pattern illustrates another Gartley pattern, where we apply our trading strategy. Gartley invented this method, which is equally valuable for various timeframes. It offers an excellent potential to understand any possible continuation or trend reversal in the near future.
I determine if it actually works and whether you should trade it. You are now looking at the weekly chart of the NZD/USD Forex pair. The image illustrates a Gartley pattern using a Metatrader MT4 Gartley indicator. When the Gartley pattern is bearish, then you use the same two rules to open a trade.
The Gartley pattern can be applied to all time frames, but its average returns are so small on a 1, 5, or 60-minute chart that it is not worth trading. On intraday charts, the pattern has a 40 to 50% success rate, but the profit per trade is very low. You can automatically identify Gartley patterns using TradingView’s Harmonics Indicator. To do it manually (which I do not recommend), look for a significant price move upward (XA), followed by a retracement (AB) that typically retraces 61.8% of the XA leg. The BC leg moves upward again, retracing 38.2% to 88.6% of the AB leg.
Traders are always looking for a way to follow the pulse and rhythm of the market and the harmonic patterns do just that. We know that the Crab harmonic pattern is one of the many harmonic patterns named after animals…. Backtesting is crucial for trading strategies, including the Gartley pattern. While a complete backtest may be challenging due to subjectivity, historical data-driven approaches provide insights into performance and statistical advantages.