How to Trade the Gartley Pattern in Forex: A Complete Guide

In the fast-moving world of Forex trading, identifying reliable chart patterns can make a big difference. One of the most powerful and widely recognized harmonic patterns is the Gartley pattern. If you're looking to improve your technical trading strategy, learning how to spot and trade the Gartley pattern could be a game-changer.

In this article, we'll break down what the Gartley pattern is, how to identify it, and—most importantly—how to trade it effectively.

What Is the Gartley Pattern?

The Gartley pattern is a harmonic chart pattern introduced by H.M. Gartley in his book Profits in the Stock Market (1935). It helps traders identify potential reversal zones based on Fibonacci ratios.

It looks like a stretched-out “M” (bullish) or “W” (bearish) and consists of five price points: X, A, B, C, and D. The final point (D) is where traders typically look for a reversal trade.

Fibonacci Ratios That Define the Gartley Pattern

For a pattern to qualify as a Gartley, it must follow these Fibonacci guidelines:

• AB = Retraces 61.8% of XA

• BC = Retraces 38.2% to 88.6% of AB

• CD = Extends 127.2% to 161.8% of BC

• AD = Retraces 78.6% of XA

The point D is the potential reversal zone (PRZ)—this is your entry zone.

Fibonacci Ratios That Define the Gartley Pattern

For a pattern to qualify as a Gartley, it must follow these Fibonacci guidelines:

• AB = Retraces 61.8% of XA

• BC = Retraces 38.2% to 88.6% of AB

• CD = Extends 127.2% to 161.8% of BC

• AD = Retraces 78.6% of XA

The point D is the potential reversal zone (PRZ)—this is your entry zone.

How to Identify the Gartley Pattern

1. Find the XA Leg

This is the first move—can be bullish or bearish. Identify a strong swing high to swing low (or vice versa).

2. Look for the AB Retracement

The AB leg should retrace about 61.8% of the XA leg.

3. Identify the BC Leg

BC should retrace between 38.2% and 88.6% of the AB leg. This leg should go in the opposite direction of AB.

4. Measure the CD Leg

CD should be an extension of BC, ideally between 127.2% and 161.8%.

5. Confirm the AD Retracement

From X to D, the full retracement should be around 78.6% of the XA leg.

How to Trade the Gartley Pattern

Once the pattern is identified and all Fibonacci levels align, here’s how to trade it:

✅ Entry Point

• Enter at point D, when price completes the pattern.

• Use confirmation tools like candlestick patterns, RSI divergence, or MACD crossover for extra validation.

  
  

🛑 Stop Loss

• Place the stop loss just beyond point X.

• This gives the trade some breathing room but protects you if the pattern fails.

  
  

🎯 Take Profit Targets

Use Fibonacci retracements of the AD leg:

• Target 1: 38.2% of the AD leg

• Target 2: 61.8% of the AD leg

• Target 3 (optional): Full retracement back to point A

Scaling out at different levels is a great risk management strategy.

Pro Tips for Trading the Gartley Pattern

• Use it in conjunction with trendlines, support/resistance, or other harmonic patterns.

• Avoid trading Gartley in low-volume or choppy market conditions.

• Backtest on different timeframes before going live—this pattern works well on 1H, 4H, and daily charts.

• Combine with momentum indicators like RSI or stochastic to spot overbought/oversold conditions at point D.

Final Thoughts

The Gartley pattern isn’t magic, but when used correctly, it’s a high-probability setup that can give Forex traders a real edge. It blends structure and Fibonacci precision to pinpoint potential reversals with excellent risk-reward ratios.

Like all strategies, it’s not foolproof—practice, backtest, and combine it with solid risk management to truly make it work for you.