Gartley Pattern Forex Trading Strategy

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Gartley Pattern Forex Trading Strategy

Forex trading is about probabilities. It is about having a strategy that could yield profits when repeated multiple times over the long run.

But how do traders prove that a strategy would work? Some traders do back testing. This is the process wherein they would look at historical price charts and observe if their strategy thesis resulted in profits most of the time whenever the trade setup appears. This is a great start. However, it is also prone to bias. Traders tend to bend the rules set in their thesis to fit a profitable trade setup.

Another option would be to do forward testing. This is the process of taking paper trades, demo trades or trading on small accounts to prove that a strategy works. This could be the best option. However, it takes too much time. Trading strategies need a huge sample size in order to be proven right. Some seasoned traders would say that a strategy should be forward tested for six months or more in order to be proven.

However, there are strategies that have already been proven to work. One of this is trading Harmonic Patterns. Harmonic Patterns are recurring price patterns which adhere to the Fibonacci ratio. These patterns could indicate a bullish or bearish price movement with a high degree of accuracy.

Gartley Patterns Indicator

The Gartley Pattern is one of the most popular Harmonic Patterns discovered. It is a bullish price pattern composed of five points referred to as point X, A, B, C and D. These points form an “M” shaped pattern based on the Fibonacci Ratio.

The Gartley Pattern has been back tested by its author and some claim that the back test yields an 80% – 95% accuracy. Many traders who are trading it on live accounts claim a 60% – 70% win rate, which is more than enough to turn in a profit over the long run.

The Gartely Patterns indicator helps traders identify this elusive yet very profitable price pattern. It identifies swing points and measures the ratios of the distance between the swing highs and swing lows in order to assess if the ratios fit the Gartley Pattern. If so, the indicator shades the pattern to help traders visualize it.

This indicator also places a box at the area around point D to identify the area where price may reverse. Some traders use this box as an area to wait for possible retests before a bounce off. Others use this area as a basis for the stop loss.

This indicator also marks entry points with arrows confirming a viable entry to confirm that price is reversing from point D.

Trading Strategy

Although the Gartley Pattern is a very complex price pattern, this strategy makes it very simple.

It makes use of the Gartley Patterns indicated by the indicator as an early detection of a possible reversal. Trades are then considered whenever an arrow is placed on the chart confirming the possible Gartley Pattern reversal.

However, traders should also identify if the reward-risk ratio on the trade setup would be worth the risk. Trades with low potential profits should be avoided. Only patterns with high potential yields should be traded.

Indicators:

  • gartley-patterns (default setting)

Preferred Time Frames: 15-minute, 30-minute, 1-hour, 4-hour and daily charts

Currency Pairs: major and minor pairs

Trading Sessions: Tokyo, London and New York sessions

Trade Setup

Entry

  • The indicator should detect a Gartley Pattern indicated a by a blue shaded area.
  • Price action on point D of the Gartley Pattern should show bullish reversal candlestick patterns.
  • The Gartley Patterns indicator should print an arrow pointing up indicating the entry signal.
  • Enter a buy order on the confirmation of these conditions.

Stop Loss

  • Option 1: Set the stop loss on the fractal below the entry candle.
  • Option 2: Set the stop loss below the red box on point D.

Take Profit

  • Set the take profit target at point C of the pattern.

Gartley Pattern Forex Trading Strategy

Gartley Pattern Forex Trading Strategy 2

Gartley Pattern Forex Trading Strategy 3

Conclusion

This Harmonic Pattern trading strategy is a working trading strategy which many traders have already been profiting on. It is a high win rate and high reward-risk type of strategy which allows traders to profit so much from the market.

Trading this strategy though is quite a challenge. This is because this pattern does not occur too often.

As of the time of writing this, there are only three patterns that are available. Two are still on going so we cannot show you how those patterns worked out. One pattern was completed and had the take profit on point C hit. However, this pattern is very small and only has around 1:1 reward-risk ratio.

Some traders trade on the reversal candlestick patterns on point D, while others wait for the retest and bounce off before they enter the trade. The latter option usually has the higher probability of a win and is often used by professional Harmonic Pattern traders.

This strategy requires a lot of practice, familiarity and patience. Traders should learn to wait for a Gartley Pattern to appear and should learn to observe price action around point D.

Traders who have mastered the Gartely Pattern have been profiting from the market, and so could you.


Forex Trading Strategies Installation Instructions

Gartley Pattern Forex Trading Strategy is a combination of Metatrader 4 (MT4) indicator(s) and template.

The essence of this forex strategy is to transform the accumulated history data and trading signals.

Gartley Pattern Forex Trading Strategy provides an opportunity to detect various peculiarities and patterns in price dynamics which are invisible to the naked eye.

Based on this information, traders can assume further price movement and adjust this strategy accordingly.

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How to install Gartley Pattern Forex Trading Strategy?

  • Download Gartley Pattern Forex Trading Strategy.zip
  • *Copy mq4 and ex4 files to your Metatrader Directory / experts / indicators /
  • Copy tpl file (Template) to your Metatrader Directory / templates /
  • Start or restart your Metatrader Client
  • Select Chart and Timeframe where you want to test your forex strategy
  • Right click on your trading chart and hover on “Template”
  • Move right to select Gartley Pattern Forex Trading Strategy
  • You will see Gartley Pattern Forex Trading Strategy is available on your Chart

*Note: Not all forex strategies come with mq4/ex4 files. Some templates are already integrated with the MT4 Indicators from the MetaTrader Platform.

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