Gartley strategy for binary options, The Gartley Pattern


In his book, Gartley proposed a method of technical analysis that used repetitive price retracements as the basis of future currency price action. As the analysis patterns were plotted on a chart, they formed what came to be known as the Gartley pattern. Two forms of this pattern exist: the bullish and bearish variety.

gartley strategy for binary options

In this strategy demonstration, we will show how to use a bearish Gartley pattern shown below as a trading strategy in the forex market. The bearish Gartley pattern is used as a downtrend seeking trade strategy. The bearish Gartley pattern uses retracing prices as the basis for determining when an upward retracement ends and the price gartley strategy for binary options of the underlying asset proceeds in the original downtrend direction.

gartley strategy for binary options

If you look at this chart below, it is very clear to see. On the left side of the chart, we see that the price is heading downwards, and at a point sometime on September 6,we see Expert Advisors for Binary Options 2020 price attempt an upward retracement. Point D is critical; it marks the entry point for a sell order so as to catch the full bearish continuation after the brief retracement.

A key step in identification of the Gartley pattern is to trace the price from A to D.

gartley strategy for binary options

This A-D swing should correspond to the To do this, draw the Fibonacci retracement tool starting from X to A. Once the Point D should be at the Fibonacci Please note these points very well, as failure to plot the patterns properly will disorganize the pattern and lead to false signals, which will definitely end in failure.

Obviously, you cannot wait until the entire pattern has formed before you start to do your line traces; you will be too late in catching the signal.

gartley strategy for binary options

Rather, the correct technique will be to watch for a period of downtrend, and then as soon as the price shows a bullish retracement, take the top of the highest retracement candle as point X. If the price briefly shifts down in the direction of the original trend, trace a line from X to the bottom of that move to form the X — A line.

Watch again to see if the price gartley strategy for binary options upwards but not up to the level of point X.

gartley strategy for binary options

At this juncture, trace another line from A to the peak of the 2nd move point B to form line A — B. The screen is clean, clear and everything is seen as it should appear without ambiguity.

The Gartley-pattern. Whether the pattern traced is bullish or bearish will not matter here. What matters is to identify the pattern and trace it accordingly. The direction of price action from point D is always known. It is in the opposite direction from the price move from C to D.

Of course, there is a bullish variety for this pattern, and we shall identify how to use it as a forex trading strategy in our subsequent blog posts.