Gartley Pattern: Structure and Trading Method

The Gartley is the grandfather of harmonic trading — first drawn in 1935, still reliable today.

The Gartley pattern, introduced by H.M. Gartley in Profits in the Stock Market (1935) and refined with Fibonacci ratios by Scott Carney, is the foundational harmonic structure. It is a retracement-based reversal pattern that completes at the 0.786 level of the XA leg.

The structure

A bullish Gartley forms after a decline; a bearish Gartley forms after a rally. The five-point structure is:

• X to A — the initial impulse leg.
• A to B — retraces 0.618 of XA.
• B to C — extends 0.382 to 0.886 of AB.
• C to D — completes at 0.786 of XA.

The defining rule: D must retrace exactly 0.786 of the XA leg. Without that ratio, it is not a Gartley.

Validating the pattern

A qualifying Gartley needs all four ratios to hold:

Leg	Required ratio
AB	0.618 of XA
BC	0.382–0.886 of AB
CD	1.272–1.618 of BC
AD (= XD)	0.786 of XA

If CD overshoots 0.786 significantly, the pattern is invalidated and may instead be a Bat (0.886) or Crab (deeper).

Trading the Gartley

Entry: as price reaches the 0.786 retracement, look for a reversal bar (hammer, engulfing, or VSA footprint). Enter on the reversal confirmation, not on price simply touching the level.

Stop: place just beyond point X. If price extends beyond X, the geometry is broken.

Targets:

• Target 1: 0.382 retracement of CD (conservative).
• Target 2: 0.618 retracement of CD (standard).
• Target 3: point A (aggressive).

Bullish Gartley example

1. Stock falls from X=$100 to A=$80 (XA = $20).
2. Rallies to B=$92 (0.618 retracement of XA).
3. Falls to C=$86 (within 0.382–0.886 of AB).
4. Falls to D=$84.28 (0.786 retracement of XA: 100 − 20×0.786 = 84.28).
5. Reversal bar forms at D — enter long, stop below $80.

Bearish Gartley

The mirror image forms after a rally, with D completing at the 0.786 retracement of the XA up leg. Sell on the reversal confirmation, stop above X.

Strengths and pitfalls

Strengths:

• The 0.786 level is statistically robust — it is where deep pullbacks often reverse.
• Clear, repeatable rules.
• Tight stop beyond X limits risk.

Pitfalls:

• Many "Gartleys" drawn by beginners fail the BC or CD ratio test. Verify every leg.
• In strong trends, price blows through 0.786 and continues to 0.886 (Bat) or deeper.
• Don't front-run the pattern — wait for the reversal bar at D.

Best context

Gartleys work best at confluence with a higher-timeframe support or resistance and inside a trading range. In clean trending markets, retracements often extend beyond 0.786, so bias your Gartley trades toward range-bound conditions.

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Next: the Bat pattern, the Gartley's deeper and equally reliable cousin.