Gartley Pattern Strategy For MT4

Gartley Pattern Strategy For MT4

Please note: This strategy was publicly published in the trading community and is free to use. We do NOT make an attempt to decide if this strategy is profitable or not, because we know that the major factors regarding trading results are the skills/experience of the trader who executes the strategy. Therefore, we are mainly explaining the components and rules of the strategy. If applicable, we are highlighting advantages, disadvantages and possible improvements of the strategy.

 

The Gartley Pattern Strategy For MT4 is a pure price action system that uses the Gartley pattern to spot optimal support and resistance levels. This strategy uses no other technical indicator other than the Gartley indicator itself and can be applied to all markets but is more popular in Forex trading.

This article is a complete guide for trading this system. It covers pattern identification in depth as well as the trade setup rules. But most importantly, this article explains how the Gartley pattern indicator makes the entire process more straightforward.


FREE Gartley Pattern Strategy

Download the FREE Gartley Pattern Strategy for MT4.

To receive my email 100% sure: 
Put my email on your whitelist!

 

What is the Gartley pattern?

The Gartley pattern is a harmonic pattern developed by H.M. Gartley that was first described in his 1935 book Profits in the Stock Market. It is sometimes referred to as the "222 pattern" because 222 is the page number of Gartley's book where the pattern is found.

Harmonic patterns are geometric patterns that use Fibonacci numbers. Trading such patterns carry the assumption that price will operate base on the sequence of Fibonnaci's ratios. Other forms of a harmonic pattern may look similar to the Gartley, like the "bat pattern," but the Gartley, by far, is the most common one.

 

How to draw the Gartley pattern

The challenge in using the Gartley for trading is constructing it on the chart. There will be four points that coincide with the market's move that a trader will have to plot, and Fibonacci levels measure each move or the distance from one point to another. A move from one point to another will be referred to as “move 0 to 1,” for example.


  1. Using the Fibonacci retracement tool, the distance between 1 and 2 should at least .382 up to a .618 retracement of move 0 and 1.
  2. Next, the move 2 to 3 should be either .382 up to .886 retracement of move 1 and 2.
  3. Lastly, the move between 3 and 4 should be 1.27 of the extension of move 1 and 2.

 

BUY SETUP

For a buy setup, this pattern sequence should occur in an uptrend, which means that move 0 to 1, or the first leg, should be heading up. Then, the Fibonacci retracement tool (drawn from 0 to 1) measures how move 1 to 2 falls on these levels. If move 1 to 2 reaches the level within .382 and .618 without touching 0.786, then that is a valid move.

Next, 1 to 2 is measured using the same Fibonacci retracement tool, with move 2 to 3 paid particular attention to. 2 to 3 must retrace from .382 to .886. Lastly, move 1 to 2 is measured again, but this time using the extension levels. For move 3 to 4 to be valid, it must reach 1.27.

With the completion of this pattern, the expected move is headed upwards. Therefore, a buy limit order can be placed on the extension to 1.27 of the 3 to 4 move. Another entry is when price makes a bounce to the upside following point 4. The stop-loss can be positioned at the most recent swing low or at point 0.

And the initial profit target can be at point 3 all the way to point 1. 

 

SELL SETUP

A sell trade with the Gartley works the opposite way. The first leg of the pattern should be downward. Then the Fibonacci retracement tool is drawn in the same manner as with the BUY setup: from 0 to 1 and from 1 to 2. The stop-loss is placed at point 0 or the most recent swing high. And the profit targets are from point 3 to point 1.

 

What does the pattern signify?

This pattern neither indicates volatility, market condition, nor trend strength. What it signifies is an opportunity to reenter the established direction of move 0 to 1. It signals a trade setup based on the presumption that the market's trend will resume.

 

Gartley Pattern Strategy For MT4

Now, one way to make trading this system easier is to use a trading indicator for MT4. With the Gartley pattern indicator, a trader does not have to measure each move manually. Everything is simplified, and the only thing to look for once the indicator is inserted is a colored arrow that signals where the entry should be.

 

Buy Setup with Gartley Pattern Strategy For MT4


The example shown above is a bullish Gartley pattern. It has all the components of a valid Buy Setup, and even if each move is measured manually, it will map out the same coordinates and invariably yield the same pattern. 

The initial leg, which is the strong move to the upside is move 0 to 1. After that, the price fell back and retraced a complete 0.53 of the Fibonacci tool, and that is move 1 to 2. Of course, this qualifies the first criteria of a retracement that is at least .382.

Then, move 1 to 2 is measured again, and the retracement of move 2 to 3 is 0.55. Finally, the last move from 3 to 4 is 0.78 retracement of move 0 to 1 or just under the 1.27 extension of move 1 to 2.

The light blue arrow marks the signal to enter after point 4, which comes after a clear indication that price is burgeoning a rally. Alternatively, an advance entry at point 4, as mentioned earlier, is entirely up to the trader's preference.

Initial profit target if the entry is point 4 would be point 3 then point 1. But if referring to the indicator, the initial target would immediately be Point 1 and the stop loss is Point 0.

 

SELL Setup with Gartley Pattern Strategy For MT4


The pattern can also work on shorter time frames like the 15-minute chart or higher. The example above is with the 1H chart and similar to the BUY setup, the pattern starts with a strong move down. The retracement of move 1 to 2 is .382. Then, move 2 to 3 retraced .854 of move 1 to 2. Lastly, move 3 to 4 retraced 0.618 of move 0 to 1.

The red arrow marks the entry for this short setup, but as with the long setup, earlier entries are also permitted, and the same points are used for stop-loss and take profit.

 

If you trade on a real money account then we suggest that you use a conservative risk per trade like 0.5% to 2%. However, we recommend that you first trade the system a few weeks on a demo account with paper money.

 

Download the complete system description and the files here:

FREE Gartley Pattern Strategy

Download the FREE Gartley Pattern Strategy for MT4.

To receive my email 100% sure: 
Put my email on your whitelist!

 

Partially Automated Trading Besides Your Day Job

Alerts In Real-Time When Divergences Occur

About Me

I'm Mike Semlitsch the owner of PerfectTrendSystem.com. My trading career started in 2007. Since 2013 I have helped thousands of traders to take their trading to the next level. Many of them are now constantly profitable traders. 

The following performance was achieved by me while trading live in front of hundreds of my clients:

Connect With Me:  

Results From 5 Months!
This service starts soon! Be the first who get's notified when it begins!

This FREE Indicator Can Transform
Your Trading!

FREE Indicator + Telegram Group


Request the Ultimate Double Top/Bottom Indicator which is used by 10,000+ traders.