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Chapter 17, Part III - Gartley's Patterns.

Discussion in 'Complete Trading Education- Forex Military School' started by Administrator, Oct 13, 2011.

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  1. Administrator

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    Part III. Gartley’s patterns. [​IMG]
    Commander in Pips: Let’s continue to deal with Gartley patterns. We’ve already discussed how to trade them on the example of AB=CD pattern. Such kind of approach acceptable to any Gartley pattern, but still we will give some more clarification when it is really needed. Most content we will spend on describing patterns and noting crucial moment in their formation.

    Gartley “222” pattern


    [​IMG]

    This pattern is easy to understand, because it consists of AB=CD pattern and another swing – look at picture:

    [​IMG]
    Pipruit: And why it calls “222”?​
    Commander in Pips: This is an interesting story – name “222” has linked to it, because Gartley told about this pattern on 221 - 222 pages of his book in 1935.

    So, as you can see here – while AB=CD pattern consists of just 3 legs, “222” consists of four. There is another swing that anchors the AB-CD pattern. Also, to be valid, a “222” pattern has to have AB-CD as its part.

    This initial swing marked as X to A. As AB=CD as “222” pattern could be found on any market and any timeframe. This pattern is widely spread and could be met very often. This is continuation pattern, and it’s major idea that we should buy/sell the initial AB-CD retracement after trend shifting. So, we act as with simple AB=CD in direction of previous X-swing, that we suppose was the initial thrust after trend reversal.

    As with others patterns “222” patterns have some crucial moments:

    1. D completion point can’t exceed X;

    2. The C point can’t exceed A, although it can be equal to it, so that after the initial X-A swing market forms double top or double bottom, when AB equals BC;

    3. Point B can’t exceed X also;
     
    #1 Administrator, Oct 13, 2011
    Lasted edited by : Nov 8, 2011
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