Technical Analysis

The Bearish Gartley Pattern

What is the Bearish Gartley Pattern?

  • First introduced in 1935 by trader H.M. Gartley in his book, “Profits in the Stock Market”
  • Contains an bearish ABCD pattern preceded by a significant high or low (point X)
  • A visual, geometric price/time pattern comprised of 4 consecutive price swings, or trends-it looks like a “W” on price chart.
  • A leading indicator that helps determine where & when to enter short (sell) position, or exit along (buy) position.
Bearish Gartley Pattern

Why is the Bearish Gartley Pattern important?

  • Helps identify higher probability selling opportunities in any market (forex, stocks, futures, etc.), on any timeframe (intraday, swing, position).
  • Reflects convergence of Fibonacci retracement and extension levels at point D suggesting stronger level of resistance, thus higher probability for market reversal.
  • X-to-A ideally moves in the direction of the overall trend, in which case the move from A-to-D reflects a short-term correction of established downtrend.
  • X-to-A ideally moves in the direction of the overall trend, in which case the move from A-to-D reflects a short-term correction of established downtrend.
  • May provide a more favorable risk vs. reward ratio, especially when trading with the overall trend.

So how do I find it?

Each turning point (X, A, B, C, and D) represents a significant high or significant low on a price chart. These turning points define the four consecutive price swings, or trends, which make up each of the four pattern “legs.” These are referred to as the XA leg, AB leg, the BC leg, and the CD leg.

bearish gartley pattern

Bearish Gartley Pattern Rules (sell at point D)


Bearish Gartley Pattern Rules
  1. Swing up from A-to-D will typically be 61.8% or 78.6% retracement of XA
    1. Must be valid ABCD pattern observed in move from A-to-D
  2. Time from point XA and AD ideally in ratio and proportion
  3. Limited instances where ABCD move completes at 100% of XA (double top)
    1. Time of XA and AD should be equal for “true” double top
  4. Pattern failure (price moves beyond point X) may indicate strong continuation move in progress
    1. Price may move up to at least 127.2% or 161.8% of XA

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