Gartley Pattern

The Gartley Pattern was designed as a swing  trading strategy. It was originally discovered by H.M Gartley in 1935. This pattern can be identified on any timeframe. Gartley described both buy and sell patterns identically, he had different diagrams for each. It was the AB=CD pattern within the Gartley sell pattern that led to the nickname Gartley “222.” Gartley applied this particular pattern to all the market indexes.
Larry Pesavento found about 20 years ago that by further adding the ratios from the Fibonacci summation series, he could develop a solid trading pattern. Gartley also used ratios of one-third and two-thirds with this pattern but did not use ratios from the Fibonacci summation series. The main Fibonacci retracement ratios that we apply to the Gartley pattern include:.618, and .786.
Gartley stated in his 1935 masterpiece that over a 30-year period he found these patterns to be profitable in 7 out of 10 cases. The statistics validating this are still the same as Gartley suggested over 70 years ago.

Market Structure

There are tons of different indicators that you can put on your charts to help you identify a trending market and trade with it. Many traders spend countless hours and dollars on trend-following trading systems or on indicators that just end up confusing them and making the process of trend discovery a lot more difficult than it needs to be.

As a market moves higher or lower, its previous turning points, or swing points, become reference points that we can use to help us determine the trend of a market. The most basic way to identify a trend is to check and see if a market is making a pattern of higher highs and higher lows for an uptrend, or lower highs and lower lows for a downtrend. Take a look at this simple diagrams below; it shows us the basic idea of looking for higher highs (HH) and higher lows (HL) for uptrends and lower highs (LH) and lower lows (LL) for downtrends:

Bear Continuation Pattern