Trading Forex with Gartley Pattern

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Trading Forex with Gartley Pattern

Previously, we already knew the basic of Harmonic Price Pattern, namely ABCD and Three-Drive Pattern, all of which could not be separated from the terms Fibonacci Retracement and Extension.On this occasion we will discuss other Harmonic indicators, namely Gartley Pattern, Crab Pattern, Bat Pattern, and Butterfly Pattern.
Gartley Pattern, this name is taken from a well-known smart trader, Harold McKinley Gartley,who has a stock recommendation service with many followers in the mid-1930s.
The service is the first service that uses Statistical and Statistical Science to analyze behavior on the stock exchange.
The Gartley method in analyzing stock market behavior is able to answer two of the most fundamental questions in the world of trading, namely what and when is the right time to buy.
Because of Gartley’s success in analyzing the stock market, this method was immediately widely used by traders in all types of markets including the forex market.
Gartley pattern is basically the same as ABCD Pattern but with higher and lower values. The Gartley pattern will look like the letter “M” for the bullish pattern and “W” for the bearish pattern .
To form a perfect Gartley Pattern, the following rules must be fulfilled,
  1. The movement of line AB must be 0.618 from the correction or retracement of the XA line movement.
  2. The BC line movement must be 0.382 or 0.886 from the correction or retracement of the AB line movement.
  3. If the correction or retracement of the BC line movement is 0.382 from the AB movement, then the CD line must be 1272 from the BC line movement. So, if the BC line movement is 0.886 from the AB line movement, then the CD line must be an extension or continuation of 1,618 from the BC line movement.
  4. The movement of the CD line must be 0.786 from the correction or retracement of the XA line movement.
From the Gartley pattern we can lower it into several other important indicators, namely the crab pattern, bat pattern, and butterfly pattern.
We start with Crab Pattern or Indonesian Crab Pattern,
Crab Pattern has a very high Reward to Risk Ratio so we must be strict in implementing risk management in the form of stop loss.
To form a perfect Crab Pattern, the following rules need to be applied, including:
  1. The movement of line AB is a correction or retracement of the XA line of 0.382 or 0.618.
  2. The BC line movement is a correction or retracement of the AB line of 0.382 or 0.886.
  3. If the BC line movement is a correction or retracement of AB at 0.382 then the movement of the CD line is 2.24 from the BC line movement. As a result, if the BC line movement is a correction or retracement of AB at 0.886 then the movement of the CD line will be 3.618 extension (continued) from the BC line movement.
  4. The movement of the CD line is the extension (continued) the movement of the XA line is 1.618.
Next is the Bat Pattern which is a derivative of Gartley Pattern. Bat word which means bat indeed shows that this pattern forms a bat pattern :). This pattern was discovered by Scott Corney in 2001.
Called Bat Pattern if it meets some of the following criteria,
  1. The movement of the AB line is a correction or retracement of the movement of the XA line of 0.382 or 0.500
  2. The BC line movement is a correction or retracement of the AB line movement of 0.382 or 0.886
  3. If the BC line movement is a correction or retracement of the AB movement of 0.382 then the movement of the CD line is the extension (continued) from the BC line movement of 1.618. As a result the BC line movement is a correction or retracement of the AB movement of 0.886 so the movement of the CD line is the extension (continued) from the BC line movement of 2.618
  4. The movement of the CD line should be a correction or retracement of the XA line of 0.886
Next is Butterfly Pattern which is the last type of harmonic price pattern, this indicator was created by Bryce Gilmore.
Butterfly pattern that is formed perfectly is indicated by the presence of a correction or retracement line in the form of line AB whose value is 0.786 XA line movement.
To form a Butterfly Pattern must at least follow some of the following rules,
  1. The movement of line AB is a correction or retracement of the movement of the XA line of 0.786
  2. The BC line movement is a correction or retracement of the AB line movement of 0.382 or 0.886
  3. If the BC line is a correction or retracement of the AB line movement of 0.382 then the CD line is the extension (continued) from the BC line of 1.618. Vice versa, if the BC line is a correction or retracement of the AB line movement of 0.886 then the CD line is the extension (continued) from the BC line of 2.618
  4. The CD line is an extension (continued) of the XA line movement of 1.27 or 1.618.
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