# The Gartley Pattern in Detail

This pattern is probably the first and the most famous complex harmonic configuration. Its ratios are easy to memorize and it is more common than the others. Here is how to detect a Gartley pattern:

• The first leg (XA) must retrace back 61.8%.
• The second leg (AB) must also retrace back 61.8%.
• The third leg (BC) must retrace back 161.8% which is a simple AB = CD pattern.
• The whole retracement from the beginning (XA) to the top must be 78.6%.

The example above shows an example on the Gartley, the one where all the ratios are perfect. The next chart shows a bearish Gartley on the EURUSD. Even though the pandemic was mostly controlling the severe volatility, we have managed to get a reaction around the Gartley levels.

It becomes clear that a bullish Gartley resembles an M while a bearish Gartley resembles a W where we expect a form of reaction around the D point. The pattern is always composed of five points in time XABCD where we trade the last point and manage our risk according to specific measures.

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# Detecting the Gartley Pattern Step-by-Step

The Gartley pattern can start to be detected around the middle of point C. Therefore, we have enough time to act on it without any hindsight bias or delay. The below plots show how to detect one across time:

The first step above is simply detecting an impulse move following by a reactionary move that should retrace back to 61.8%. After that we have to wait whether the reaction will retrace back to 61.8% of the new leg or not.

Having retraced back 61.8% of the new leg, we are now looking for 1.618 retracement of the new leg and the surpass of the B point. We should start to see about now the formation of a W (Bearish Gartley).

Now, we can even draw the Gartley. All we need is the expected reaction from the D point defined as the 78.6% retracement from the X point all the way down to the A point as well as the 1.618 retracement of the BC move. This means that the length of the CD leg should equal 1.618x the length of the BC leg.

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