A harmonic reversal pattern linking five points XABCD by Fibonacci ratios. When the final D lands on the 0.786 retracement PRZ, the crowd that has been measuring the overshoot stops, and the reversal begins.
A Gartley is a harmonic reversal pattern that links five points (XABCD) by Fibonacci ratios.
Price never moves in a straight line. It rises, retraces, rises again, retraces again. When the ratios of those rises and retracements line up on specific Fibonacci numbers, the market tends to reverse at the final point, D. That is the idea behind the Gartley.
From the origin X, a first wave XA appears. From there price swings through B, C, and D, completing at D. A bullish Gartley forms a W shape with D at the bottom, a bearish Gartley an M shape with D at the top.
The heart of the pattern is that D lands in a Potential Reversal Zone (PRZ). Several Fibonacci ratios cluster near D, and the read is that price stalls there. Rather than chasing a shape, you measure the limit of the overshoot by ratio. That is the discipline of harmonics.
The original was laid out by H.M. Gartley in 1935. Scott Carney later codified the precise Fibonacci ratio for each point, giving the pattern the form used today.
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