Mastering the Gartley Pattern in Forex Trading

Who Was Gartley?

Harold McKinley Gartley was a pioneering market technician who, back in the 1930s, ran a highly respected stock market advisory service. He was among the first to use statistical and scientific techniques to analyze financial markets.

In his work, Gartley focused on solving two of the biggest challenges traders face: what to buy and when to buy it. Over time, traders realized that the patterns he identified weren’t just limited to stocks—they applied across different markets, including forex.

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Understanding the Gartley Pattern (Also Known as the “222 Pattern”)

The Gartley pattern—popularly known as the “222” pattern due to its placement on page 222 of his book Profits in the Stock Market—is an advanced harmonic price structure based on Fibonacci ratios. It builds upon the classic ABCD pattern and is typically formed during a correction within a larger trend.

Gartley patterns appear as “M” shapes in bullish setups and “W” shapes in bearish ones. These formations offer traders high-probability entry points that align with the broader trend.

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Key Fibonacci Ratios of a Perfect Gartley Pattern:

• AB = 61.8% retracement of XA
• BC = 38.2% or 88.6% retracement of AB
• CD =
  • If BC = 38.2%, then CD = 127.2% extension of BC
  • If BC = 88.6%, then CD = 161.8% extension of BC
• CD = 78.6% retracement of XA

Spotting this structure on a chart can be tricky, but using Fibonacci tools step-by-step makes it easier and more accurate.

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Variations of the Gartley Pattern: The “Animal” Patterns

As harmonic trading evolved, other traders introduced variations of the Gartley pattern. These were named—somewhat playfully—after animals.

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The Crab Pattern

Discovered by Scott Carney in 2000, the Crab pattern is considered one of the most precise harmonic patterns due to its extreme Potential Reversal Zone (PRZ).

Crab Structure:

• AB = 38.2% or 61.8% retracement of XA
• BC = 38.2% or 88.6% retracement of AB
• CD =
  • If BC = 38.2%, then CD = 224% extension of BC
  • If BC = 88.6%, then CD = 361.8% extension of BC
• CD = 161.8% extension of XA

This pattern allows for tight stop-loss placement and favorable risk-to-reward setups.

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The Bat Pattern

Introduced by Scott Carney in 2001, the Bat pattern emphasizes the 88.6% retracement of XA as a crucial reversal zone.

Bat Structure:

• AB = 38.2% or 50% retracement of XA
• BC = 38.2% or 88.6% retracement of AB
• CD =
  • If BC = 38.2%, then CD = 161.8% extension of BC
  • If BC = 88.6%, then CD = 261.8% extension of BC
• CD = 88.6% retracement of XA

This structure also offers a great reversal point and helps traders identify trend continuations or reversals.

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The Butterfly Pattern

Developed by Bryce Gilmore, the Butterfly pattern differs from the others in that its CD leg extends beyond the initial XA move.

Butterfly Structure:

• AB = 78.6% retracement of XA
• BC = 38.2% or 88.6% retracement of AB
• CD =
  • If BC = 38.2%, then CD = 161.8% extension of BC
  • If BC = 88.6%, then CD = 261.8% extension of BC
• CD = 127% or 161.8% extension of XA

This pattern often signals the end of a strong trend and the beginning of a major reversal.

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Final Thoughts

Harmonic patterns like the Gartley and its variations are powerful tools for technical traders. While they require a good understanding of Fibonacci ratios and patience in identifying valid setups, the reward-to-risk potential can be significant.

If you’re serious about improving your forex trading strategy, mastering these patterns is a smart move.

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