What it means
The Gartley is the original harmonic pattern, identified by H.M. Gartley in 1935. Five points (X, A, B, C, D) connected by four legs. Specific Fibonacci ratios: AB = 0.618 of XA (retracement); BC = 0.382 to 0.886 of AB; CD = 1.272 to 1.618 of BC; AD = 0.786 of XA. When all ratios align within tolerance, the pattern is valid and predicts reversal at point D in the direction back toward X.
Why it matters
Harmonic patterns formalize the idea that price reactions occur at specific Fibonacci ratios. The Gartley's 60+ year history provides extensive backtest data. Bulkowski reports ~65-70% reaction rate at D points when ratio criteria are strictly met. Less than 1:3 of visually-similar setups actually meet the strict ratio rules — discipline in identification is the dominant edge.
How to use it
Use a harmonic-pattern scanner (or measure manually). Confirm all four ratios within tolerance (typically ±5%). Enter at D point in the direction of XA reversal (long if XA was downward). Stop just beyond X. Target the 38.2%, 61.8%, and 100% retracements of CD.
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