# What is the Bullish Gartley Pattern?

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This is a brief look at the bullish Gartley pattern.

The Gartley pattern is a complex chart pattern that is used to determine trading signals based on detecting price retracement points for any upwards or downwards movement of a currency pair. The Gartley pattern is a retracement-based method of chart analysis and for this reason, the Fibonacci retracement tool is used to accurately determine the entry and exit points for this pattern.

In the light of this definition, we can safely say that a bullish Gartley pattern is a complex chart pattern that aims to identify trade signals based on retracing price points for any downward movement of a currency pair, utilizing the Fibonacci retracement tool.

Outlined for the first time by H.M. Gartley in his 1935 book Profits in the Stock Market, Gartley’s original description did not make use of the Fibonacci retracement points. The bullish Gartley pattern may occur at the top of a trend and is a bullish reversal pattern.

The pattern above is a diagram of the bullish Gartley pattern, and it implies that if this occurs at the bottom of a trend, the price action of the currency pair is likely to shoot upwards from point D.

The bullish ABCD pattern which is preceded by the point X is easily recognizable to traders as an “M” (or inverted “W”) pattern on the charts. The pattern is a wave pattern which starts a point X, moves up to point A, resumes a short-lived downward move to point B, up again to a point C (which may or may not be on the same level as point A), then resumes a downward move to point D before the price action makes a full bullish reversal.

The bullish Gartley pattern therefore helps forex traders to determine when to exit a short position or when to enter a long position, usually at point D.

The chart below shows an example of a classical bullish Gartley pattern that occurred in the EUR/USD.

BULLISH GARTLEY PATTERN ON ETORO CHART

Application of the Bullish Gartley Pattern

The key to being able to identify and utilize a bullish Gartley pattern for a good trade call lies in the trader’s ability to spot the formation of the waves early on, and to be able to identify point D when it forms.

Here are the rules regarding entries with the bullish Gartley pattern:

1)      The AD swing should ideally be a 61.8% retracement of the XA line, with a valid ABCD pattern forming the inverted “W” or “M” shape. At other times, it could be a 161.8% retracement. This means that when the Fibonacci retracement tool is applied from point X to point A, the 61.8% level sould be easy to discern, and “ABC” should form to end at point D (which should be on the Fibonacci 61.8% point).

2)      In some circumstances, the ABCD move will form a double bottom, with the bottoms forming at points X and D.

3)      The trader should always be alert to pattern failures. The “M” wave must form and adhere to what has been said in (1) and (2).

Traders are encouraged to master this pattern on a demo trading platform, so that this pattern can be used to pick pips from the forex market.

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