Five points (X · A · B · C · D) linked by set ratios. The last retracement reaches about 78.6% of the first leg and does not break its start, so D is a reversal zone to watch.
A worked example that explains the rule, not a stock price · prices on the right axis, sessions under the volume bars
More detail
The idea is simple: the market rose hard, then retraced in stages, and the retracement stayed above the starting point. Authors added the ratios after Gartley, so each ratio is a range to measure, not an exact figure.
Reading it stage by stage
XAThe first rise. Its length is the basis of all the ratios after it.
ABA retracement to about 61.8% of XA.
BCA partial bounce that does not exceed A.
CDA fall to about 78.6% of XA, above X.
Confirmationa close back above the last small high after D.
Recognition rules
Leg XA is a clear rise. It is the ruler that the ratios are measured against.
B retraces about 61.8% of XA.
C retraces between 38.2% and 88.6% of AB.
D reaches about 78.6% of XA, and CD reaches between 1.27 and 1.618 of BC.
D does not break X. If it breaks it, this is not the pattern.
Confirmation is a close back above the last small high after D.
Measuring the target
Point C is the first reference: an entry after D at $120.8 and a reference at $138.2. The pattern is invalidated if price breaks X at $100.0. The calculation comes from the chart itself: X at $100.0 and A at $150.0. So B sits at $119.1, which is 61.8% of the leg, and D sits at $110.7, which is 78.6% of it. Try the calculation yourself on any chart: take the length of XA, multiply it by the ratio, and subtract the result from A. If the point does not fall near the result, it is not this pattern.
Where it fools you
Buying at the touch of D without a close that confirms the reversal. D is a zone to watch, not an entry price, and price may extend it to X.
Bending the ratios: if you must move a point to make the ratios fit, the pattern does not exist. The wider the tolerance, the more false shapes appear.
Drawing it on a short, noisy timeframe produces points that nobody else sees.
Open the daily timeframe for any symbol and draw the pattern yourself. Your drawing is saved per symbol in your browser, and the terminal does not name or detect the pattern.
╱ Trendline
⇕ MeasureTarget equals pattern height
We do not detect chart patterns with a numeric rule: telling them apart takes judgment on the chart. Candlestick patterns with a numeric rule are detected daily by the candlestick pattern scanner.
Mirror image: Bearish Gartley
The same pattern turned upside down, with the same rules in the opposite direction. What was a top becomes a bottom. The trigger, target and invalidation all flip direction.
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