Hi There, I just started a new post “KISS Principle Trading” and in it I am putting my live trades (as much as possible) and its results as we go along. However, a few of our fellow traders mentioned that they found the Gartley a complicated method. This is why I decided to start this new topic where I can show in ONE page how to trade this pattern. I called it “The Novice Version”. Here I will also add examples as well as a Video in the future.
For now, I will list the key tools we need and place the one page document.
TOOLS:
- Drawing Trend Lines & Identifying a Trend
- Japanese Candlestick patterns
- RSI Divergence
- Highs & Lows
- Fibonacci retracements/extensions
I am not here to train on any of the above, If you are not verse on all of the above 5 tools then I suggest that this is not the post for you. On the other hand however, I can say that most of my profits come from trading this pattern and it is VERY EASY…at least for me.
I am currently working on FOCUSING my trading only in two type of entries:
- The Gartley
- Fibonnaci retracements in the direction of the current trend
Anything else, double tops, double bottoms, RSI divergence against the trend, Wedges, Flags, etc are to be avoided. So I am making my goal this year to limit my trading to these two trading methods.
Happy Trading
PS: I tried uploading the file but it didnt let me coz this is a new topic. So I will wait to do it in the next posts later on.
The Bull Gartley -Step 3:
“Market retraces taking out the most recent trend line and the last low with RSI Strength"
Again, in this case by the time the market reached point “X” usually the RSI will be around the 30% whilst at the point of the previous Low “L” would’ve been in “Oversold” territory. These signs are the strongest RSI signs.
Therefore, now the market must break the most recent [Inner] Trend Line AND take out the last High “H” formed before the last low “X”.
NOTE: The patterns are NOT always PERFECT, this is why I chosen this example.
Here the Copper DIDN’T TAKE OUT THE LAST HIGH, it came just short of it, however the RSI DID TRAVEL FROM 30% TO 70% as marked by the pink triangle.
For me, this counts!
AUD/USD H4 Gartley and Synchronicity within Timeframes
Here is a recent Bull Gartley we had. I was “too busy” looking one way (Bear way) that I totally misread the charts. This is why after last weekend analysis, I decided to get out of the AU Short trade asap. Luckily it hit my b/e TP before getting stopped out and I was right!
In the following 4-hour chart example we can see a textbook “Gartley” or “Bear Crown”. This gartley had an even higher % success rate (considering this set up is already highly successful) because it had a monthly chart hammer preceeding it
Read my other topic “KISS Principle Trading” for a AU 4h long trade set up that is coming up… If you are too impatient to wait for the Daily Bull Gartley that should come up in the next weeks…
A RECENT EUR/USD BULL GARTLEY: LESSON LEARNT
I have recently traded this “bull gartley” shown in the Eur/Usd a few weeks ago.
However, not having a clear “exit strategy” in my trading has been “limiting the amount of profits I could’ve accomplished”.
I identified and traded Leg “A-D” however I didn’t stay long enough. That is until I actually saw the “D62 point confirmed and completed with a Bull Candle Signal to then Exit & Reverse my trade”. I had gotten out much earlier
I identified and traded point"D62" but then again I exited when I saw the “Bear Engulfing” candle and reverse into short for a small profit (from the long) and a loss (from the short).
I then traded the short after the “shooting star”, this was ok, given that I was out of the market at the time. However, FAILING TO KEEP THE BIGGER PICTURE IN MIND, ended up NOT taking any profits, I left it on the table only to break even. Once again, had I kept my original view that the EUR/USD was in a Bull Gartley and that it should move towards its Fib 127 extension (at least), would’ve given me the chance to at least take profits from this quick short
All I am pointing out is this:
When we identify a clear Gartley, stay the course until it reaches its Fib 127 target. It is ok however, since this “may not happen always” to trail our stops, but allowing enough room for the market to do its “swings motion inside swings”…
So here it is, a recent Bull Day Gartley @ Fib 62%. Given that I have concentrating my trading on Day Charts, it is worth trading each leg of a gartley shall one identify its formation early on.
The signals are right there, starting with the Divergence that signs the possible end of a trend
So legs that are possible to trade are “X-A”, “A-D” then “D-F127” (on a daily chart)
Happy trading …
