Gartley Pattern
A five-point harmonic structure built on Fibonacci ratios. When the XA, AB, BC, and CD legs align perfectly, Point D marks one of the highest-probability buy zones in all of technical analysis.
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What Is the Gartley Pattern?
The Gartley pattern — formally the "Gartley 222" after the page number in H.M. Gartley's 1935 book Profits in the Stock Market — is the oldest and most widely traded harmonic pattern in existence. It is a five-point structure (X, A, B, C, D) built entirely on Fibonacci retracement ratios, where Point D represents the Potential Reversal Zone and the primary trade entry.
In its bullish form, the pattern describes a pullback within a larger uptrend. The XA leg is the impulse. The AB, BC, and CD legs form a corrective structure that terminates at Point D — the 78.6% retracement of XA. This is the golden ratio level: far enough into the XA move to attract buyers, but not so far that the XA swing high is seriously threatened. The result is a precisely defined buy zone with clearly measurable risk.
Key Ratios
Why the Gartley Works — And Why Point D Is So Powerful
Harmonic patterns are not magic — they are a systematic way of identifying where the market has repeatedly shown that a significant proportion of participants feel price has gone too far. The 78.6% retracement of a strong move is the last major defensive level for that move: buyers who missed the initial XA rally are now getting a second chance to enter at a 78.6% discount. Simultaneously, sellers who are short from the top of XA are approaching breakeven and considering covering their positions. Both forces create buying pressure at Point D.
The 61.8% AB retracement acts as the first filter: it confirms that the corrective structure is occurring within the context of the larger XA impulse. By the time you see AB terminate at 61.8%, you know the pattern has passed its most critical test. The BC and CD legs then build the precise reversal zone at 78.6%, creating an entry point defined entirely by the market's own natural rhythm rather than arbitrary levels.
How the Gartley Builds
The Initial Impulse
The pattern begins with a strong directional move — this is the XA leg. It is the foundation of the entire structure. In a bullish Gartley, XA is a sharp bullish move upward. Every ratio that follows is measured from the length and price of this initial leg.
The 61.8% Retracement
Price retraces from A back toward X. For a valid Gartley, AB must retrace between 61.8% of the XA move — the golden ratio. This is the most critical ratio in the pattern. If AB retraces more than 78.6% or less than 50%, the pattern is likely not a Gartley.
The Counter-Move
Price bounces from B and moves in the direction of XA again. BC can retrace between 38.2% and 88.6% of the AB leg. This flexibility makes BC the most forgiving leg of the pattern. The length of BC also determines where C must end up for the pattern to qualify.
Point D — The Buy Zone
This is the entire reason you drew the pattern. CD extends to create Point D at the 78.6% retracement of the entire XA move. This is the Potential Reversal Zone (PRZ). When price reaches Point D, you are looking for a bullish reversal candle to enter long.
The Potential Reversal Zone
Point D is where the trade lives or dies. Price arrives at the 78.6% Fibonacci retracement of XA, and you wait. Do not enter on the mere arrival of price at Point D. Wait for the reversal candle: a bullish engulfing, a hammer, a morning star, or a pin bar with a long lower wick closing near its highs.
The cluster principle: The most powerful Gartley entries occur when Point D coincides with other technical levels — a prior support zone, a round number on XAUUSD ($2300, $2400), a daily or weekly pivot, or a key moving average. Each additional confluence level that sits at or near Point D multiplies the probability of the reversal.
The failed Gartley: If price closes a full candle below the X swing low, the pattern has failed. Exit immediately. A Gartley failure is not a disaster — it is information. Failed patterns often precede strong continuation moves in the direction of the failure.
Entry, Stop, and Targets
Long on a bullish reversal candle confirmation at Point D. Do not enter on limit order alone — wait for the candle to confirm.
Below the X swing low. On XAUUSD, add 15–20 pips of buffer below X to account for stop-hunt wicks and spread.
Point A — the high from which the AB retracement began. This is the natural first profit zone.
Point B or the 127.2% / 161.8% extension of the XA leg for extended moves with strong momentum.
Gartley by the Numbers
Trading the Gartley on Gold
Gold is uniquely suited to harmonic pattern trading because XAUUSD's price movements are heavily influenced by institutional order flow, which naturally creates the measured Fibonacci swings that harmonic patterns depend on. When large position managers enter or exit gold positions, they do so at mathematically predictable levels — the same levels Fibonacci tools identify.
Round number confluence: The most powerful Gartley setups on XAUUSD have Point D landing at or near a round number — $2300, $2350, $2400, $2450. Round numbers act as natural support zones because retail stop-loss orders cluster there. When Point D arrives precisely at a round number, the reversal force is amplified by the liquidity pool sitting at that level.
Session timing: Gartley reversals at Point D are significantly more reliable when they occur during the Asian session transition (01:00–03:00 GMT), a low-volatility window where stops are frequently swept before the London open drives price back in the harmonic direction. Enter at Point D during the Asian session, survive the potential stop hunt, and ride the London open momentum.
DXY correlation for Gartley validation: A bullish Gartley on XAUUSD arriving at Point D while DXY simultaneously hits a resistance level provides strong confirmation. Gold and the dollar move inversely — a dollar stall at resistance is a natural catalyst for gold to reverse at harmonic support. This is macro confluence at its most precise.
Using higher timeframe context: Before trading a Gartley on H1, zoom out to H4 or Daily. Is Point D sitting within a larger H4 support zone? Does the broader market structure support a bullish reversal at this level? The H1 Gartley is strongest when H4 says the same area is significant support. Multi-timeframe confluence is the difference between a 55% win rate and a 70% win rate on harmonic setups.
5 Mistakes That Destroy Gartley Trades
Gartley Trading Checklist
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Related Patterns
Butterfly Pattern
A harmonic sibling with a deeper CD extension — Point D pushes beyond X for an extreme reversal setup.
ABCD Pattern
The foundational harmonic structure — every complex pattern including the Gartley is built on AB=CD symmetry.
Double Bottom
The classic W-reversal — structurally simpler than harmonic patterns but sharing the same "support holds twice" logic.
Falling Wedge
Compressing downtrend with bullish divergence — frequently forms the CD leg leading into a Gartley Point D.