1 The Edge — the claim
A Fibonacci-defined reversal zone
The Gartley is a five-point (XABCD) pattern whose legs must hit specific Fibonacci ratios. The claim: when those ratios align, point D marks a high-odds reversal zone where you can enter against the last leg with a tight, defined risk.
We present it honestly — the value is structure and confluence, and the independent evidence of edge is thin.
2 Where it works — and doesn't
Confluence, not magic ratios
Works best when…
- Point D lines up with independent support/resistance.
- The ratios are clean, not forced.
- A clear reversal candle confirms at D.
Fails / avoid when…
- Ratios are loosened to make the pattern "fit."
- A strong trend blows straight through D.
- D is taken on faith with no confirmation.
3 Setup checklist
The ratios that define it
- ✓AB = 0.618 of XA. The defining retracement of the first leg.
- ✓BC = 0.382–0.886 of AB. Within the allowed band.
- ✓CD = 1.27–1.618 of BC. The projected final leg.
- ✓D = 0.786 of XA. The reversal zone — ideally on other S/R.
- ✓Confirmation. A reversal signal at D before entry.
4 The process
Enter the reversal at D
Entry
At D (the 0.786 retracement of XA), on a reversal confirmation in the pattern's direction.
Stop (1R)
Just beyond X (the pattern's origin). Entry − stop = 1R — Gartley's tight stop is its main appeal.
Position size
Risk a small fixed % of the account; shares = risk ÷ 1R.
Exit & management
Scale targets at the 0.382 and 0.618 retracements of the AD leg (toward C and beyond); trail the remainder.
5 Worked example (illustrative)
The XABCD structure
| Account / risk | $25,000 · 1% = $250 |
| Entry at D | $50.00 |
| Stop beyond X — 1R | $47.50 · 1R = $2.50 |
| Size = $250 ÷ $2.50 | 100 shares |
| Target 1 (.382 of AD), +1.4R | $53.50 · +$350 |
| If stopped: −1R | − $250 |
6 Honest expectancy
Structured — but evidence is thin
Harmonic patterns are popular and visually precise, but they carry little rigorous, independent evidence of an edge. Point selection is subjective, and with tolerance bands around each ratio, a "pattern" can almost always be found after the fact. The honest case for the Gartley is its tight, defined risk and its use as a confluence tool — not a standalone signal.
Trade it only where D coincides with real support/resistance — and treat it as an expectation, never a guarantee.
7 Make it yours
Test before you trade
A no-risk validation routine
Mark historical Gartleys with strict ratios only, require independent S/R confluence at D, and log the result in R before checking the outcome. You'll quickly see how much the confluence filter matters.
8 Common mistakes
How traders blow this up
- Loose ratios. Bending the numbers to force a pattern.
- No confirmation. Entering at D on faith, with price still falling.
- Ignoring the trend. Fading a powerful trend at D.
- Treating D as certain. It's a zone of probability, not a wall.