Fibonacci Gartley Pattern Tutorial

Fibonacci Gartley Pattern Tutorial

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Gartley Pattern Tutorial

Bullish Gartley Reversal Pattern

BULLISH GARTLEY FREVERSAL L

begin the two step process to try and finda target

T

T 1 1 1 1 1 1 1 1 T † q T T q

for swing low D to reverse from | longorshort.com}

- — 7ñ

| | The first thing to find is F

| an impulsive move up

lÌ from a swing low Gaps

—_ 40 longorshort.comF

1 T q T T T q q T T q q T T q T

1 The first step is to BULLISH GARTLEY REVERSAL }

move [X to A] Followed

by an initial reaction A

ofleg AtoB = 60

8H

The E to C leg is the important leg to check the 7 50

| math on It should retrace the A to B leg to one of |[

the key fibonacci levels [.382 500 618 786] |[

In this case it retraced to within a hair of the 615)}

At this point on the chart the assumption is that |[ point C is the swing high and that prices will

eventually trade below swing low B We can now |Ƒ 4n

1 Calculate the length of | BULLISH GARTLEY REVERSAL

the Ato Bleg [Aminus B].| |2 Find the length of leg B to C

Now subtract that number| | Take that length and multiply it

from the top ofthe point) |by the two key fibonacei

C swing high This extension numbers to find the

range for a possible low to occur]

Ì |

eer til

eh

VC

Thy | [Pesinaresbece iI tntencion numbers Take the L272 and 1610 of © bị trocar gh pine Che oo

Bustos ier Was we ele oars

In BH wees se nen

® measuring techniques predict a low in a2 1/2 point] meee Bene eee Narrernerd ec

L— B001 February" [March [soi

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1 Here's the finalstepto BULLISH GARTLEYREVERSAL

confirm a point D reversal

lbuy point Point D should

printata key fibonacci

retracement level of

the X to Aleg | I

ao

=

closest level is I

Fightat |

ne ab=ca|

ofleg XtoA

‘The chart shows that AB= CD at 50.01 The 618

retrace of X to Ais at 49.72 and the CD "range"

calculations target a reversal between 51.89 and

49.26, The preference is to favor the lower endof

the "range" because AB=CD at the lowendand

the chart is harmonic at the 618

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lclose to the reversal "range" I The trader tries fo buy as | BuLLieH GARTLEY REVERSAL las possible The first

ltrading targetisa.618

jretracement of the

to D leg-[36.02]

‘Stop loss placementis up to the trader The next level of support below D in this example would be

around 45.50 where the 786 retrace of X to Aresides|

Others prefer a stop at about where X originated

[40.25] Stops MUST be used with this pattern

because 20% of the time it fails and extends below X

by 1.272 or 1.618 of the Xto Amove.| longorshort.com|

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Bearish Gartley Reversal Pattern

BEARISH GARTLEY REVERSAL PATTERN + 338.1

The bearish gartlay reversal nattern hegins with a |+ 334.0

fairly straight one way move off of a swing high [in

many cases it is from an all-time high] + 340.0

This drop is the X to A leg * 3276.0 This pattern is initially formed by finding what you] „ 397.0

see in the chart [an = to A decline and an A toB °

The trader now waits for another swing low to print), 3449 before we start the point "D" projection calculations "

+ 310.0

+ 306.0

« 302.0

hh « 208.0

+ 204.0 + 200.0 + 286.0 + 282.0 + 278.0

A

* 274.0

BEARISH GARTLEY REVERSAL PATTERN + 318.1 The next key to the pattern is ta check the fibonacci j* 334.0

| ratio of the B to C leg It must be within a sniffofone|, 330.0

of the key retracement ratios of the A to B leg Huh? °

| | Lets take it step by step First measure what price |* 326.0

ả

distance the Ato B leg wasin pointsand writethat |, 3999 number down Now do the same for the B to C leg

Divide the B ta Cleg number by the Ato Bnumber, |* 4318.0

| [(length of B to C leg) / (length of A to Bleg}] =ratio | 344.9

| That ratio should be about: 302 500 618nr 7HB

* 310.0 + 306.0

+ 296.0 + 294.0

J | <{50% retracement of A toBlegi+ 290.0

We can now begin to calculate the most _ + 2820 likely area that the point "D" reversal will

occur Thisis NOT a forecasting method * 278.0 predicting that prices WILL go ta point"D" s4q

it predicts where it should reverse

BEARISH GARTLEY REVERSALPATTERN *,

‘The following process is the key to the pattern ist calculate the pricé length of the’A fo B leg (B-A] and add that riumber*

to the swing low of C té project where AB=CD drew equal «

|_trlangleson the chart to help vioulle this process Next

calculate the length of the B tơC leg {B-Cl-and then take

TẢ - |fhatnumber and rnultiply it by 1.272and 1.618;add - - « those numbers seperately to the swing lot G10 get a rang „

Just to the Left on thie , chart oir can sed the

tư trithols are + predicting a reversal , point “D*could occur from as lowas~309 * toas high as ~316 - „

‘The ideal thing to happen is to have the* triange fallrightin « the projected "range"

‘The triangles simply help you visualize where point D should printif the ato B* Jeg is equal to the C to leg in length «

‘Traders now have a defined range ta expect prices to reverse from [309-316]

BEARISH GARTLEY REVERSAL PATTERN «

‘There is one last ingredient to the gartley reversal pattern, that is crucial to its success, Point "DY or it should be said

leg A to D should retrace to within a sniffof either 618 or

786 ofthe x to A leg As you can see the 618 retrace of

Ị the X to A leg also falls within the projected "range' for a

1] | [reversal to occur ‘This isthe final factor that mmust exist,

Al D around 316 *

E BCx1.618+C = 313.7 ®

1 BCk1/27240 < 309 +

Reversal Range

h

ph

(Now that prices have risen into the projected "range! the trader looks to sell longs they’ own or initiates shorts, The, [pattern reverses from this setup ~70% of the time,

‘The initial downside trading target isa 618 retface of C-D| which is around 299, (Protective stops will need to be placed for {the 30% of the time this pattern will fai

3380 334.0 330.0 326.0

3220

3180 314.0 310.0 306.0 302.0 298.0 294.0 290.0 286.0 282.0 278.0

274 270.0

338.0 334.0 330.0 326.0 322.0 318.0

3140 340.0 306.0

3020

2080

2040 290.0 286.0

2820 278.0

2740 270.0

BEARISH GARTLEY REVERSAL PATTERN + 338.0

‘A successful bearish gartley The first trading target | 34.9 was reached at 299, the 618 retracement of the C to D ở leg The second target sat the 618 retracement of the |* 330.0 Ato D leg [the dot at 291} ‘The safest and most + 326.0 covisistently met target is the 618 retracoment level of

thé Cto D leg One technique is to exit partially at the '|* 322.0

‘st target then tighten stops on the remainiig ‘|.’ 318.0 position’and hold out for; [D]- trading target two +3140

+ 3100 + 306.0

+3020 + 2080 + 2940 + 290.0

{The power of the gartley reversal pattern lies In Fes ability to give a high probability reversal price range prior to price reaching it Ahout 30% will fail Jand some will extend 1.272 to 1.618 times of the X ta.Aleg The extension numbers in this example

©longorshert.com 2001] are 353-373 sa using a stop loss is a MUST!

Bullish Butterfly Reversal Pattern

|

| |

A BULLISH BUTTERFLY BOTTOM

a |

|

AT THIS POINT ON THE CHART WHAT WE HAVE IS A |

x | MOVE OFF OF A BOTTOM [X To A] FOLLOWED BY A

DEEP RETRACEMENT LEG [A TO B] WHICH

RETRACED TO THE 786 FIBONACCI LEVEL THE B

TO C LEG WAS SHALLOW AND WITH THE LAST BAR

ON THE CHART IN A FREE FALL THE TRADER CAN

NOW ATTEMPT TO MAKE A CASE FOR WHERE THIS

NEXT LEG DOWN MIGHT END FOR A REVERSAL :

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T qT qT 1 1 qT 1 1 1 1 T T T T T T

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lber

| | FOR THE ATO B LEG

BULLISH BUTTERFLY BOTTOM

THE FIRST MEASURING STEP

TO TRY AND FIND OUT WHERE THE C To D LEG WILL

REVERSE FROM IS EASY

SIMPLY SUBTRACT THE LENGTH OF THE ATO B LEG FROM THE C SWING HIGH

AG IN ALL BUTTERFLY PATTERNS THE

TRADER IS LOOKING

‘TO BE EQUAL TO THE CTo Dies THis METHOD SHOWSẺ AB:

D ABOVE 40

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WE ALREADY HAVE THE AB=CD TARGET NUMBER AROUND 40 Now WHAT WE WANT TO FIND OUT IS

WHETHER THAT TARGET IS AT AHARMONIC NUMBER MOST SUCCESSFUL BUTTERFLY

REVERSALS OCCUR AT EITHER THE 1.272 OR 1.618 EXTENSIONS OF|

THE XTO A LEG

THE MATH IS EASY

FIND THE LENGTH OF XTo AL72.38-48.44

= 23.94] THEN MULTIPLY BY THE 1ST

HARMONIC NUMBER [ 23.94 x 1.272 30.45] Now SUBTRACT FROM THE POINT A SWING HIGH [72.38-30.45

41.93] SoTHE 1.272 EXTENSION

oF XTO A TARGETS

ABOUT A POINT AWAY FROM THE

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PRICES DECLINE INTO THE BUY ZONE AND IN THE PROCESS FORMS A BULLISH BUTTERFLY BOTTOM THE CHART IS HARMONIC AT THE 1.272 EXTENSION OF X TO AAND AB=CD,

FOR TRADERS WHO GET LONG FROM THE BUY ZONE THE FIRST TRADING TARGET TO TAKE PROFITS AT IS THE

618 RETRACEMENT

OF THE C To D LEG

@

-TI @ayZene)

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er [November [December [2001

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ATo B=.7860FXTOA

AB =CD

AToD = 1.272 0F XTOA

BUuLLisH BUTTERFLY BOTTOM

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AWE

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DEC JAN FEB 2001

1.272

AWE D

Target Price

ba is Sis 22

18} | 18

16 A 16

DEC JAN FEB 2001

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Target Price

is 618 of C (22

to D move

Target Reached] 20

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