# Gartley Pattern

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## Definition of 'Gartley Pattern'

The Gartley pattern is a technical analysis tool used to identify potential reversals in the price of a security. It is a five-wave pattern, with three waves up and two waves down. The first wave is the longest, the second wave is the shortest, and the third wave is the same length as the first wave. The fourth wave is corrective, and the fifth wave is the same length as the third wave.

The Gartley pattern is considered a bullish reversal pattern, as it signals that the price of a security is likely to reverse from a downtrend to an uptrend. However, it can also be used as a bearish reversal pattern, as it can signal that the price of a security is likely to reverse from an uptrend to a downtrend.

To identify a Gartley pattern, you need to look for a five-wave pattern with the following characteristics:

* The first wave is the longest, the second wave is the shortest, and the third wave is the same length as the first wave.
* The fourth wave is corrective, and the fifth wave is the same length as the third wave.
* The fifth wave breaks above the high of the first wave.
* The 50% Fibonacci retracement level of the first wave to the third wave is equal to the length of the fourth wave.
* The 61.8% Fibonacci retracement level of the first wave to the third wave is equal to the length of the fifth wave.

If you find a Gartley pattern, it is a signal that the price of a security is likely to reverse. However, it is important to remember that the Gartley pattern is not a guarantee of a reversal. It is simply a tool that can be used to identify potential reversals.

Here is an example of a Gartley pattern:

[Image of a Gartley pattern]

In this example, the price of a security is in a downtrend. The first wave is the longest, the second wave is the shortest, and the third wave is the same length as the first wave. The fourth wave is corrective, and the fifth wave is the same length as the third wave. The fifth wave breaks above the high of the first wave. The 50% Fibonacci retracement level of the first wave to the third wave is equal to the length of the fourth wave. The 61.8% Fibonacci retracement level of the first wave to the third wave is equal to the length of the fifth wave.

This is a signal that the price of the security is likely to reverse from a downtrend to an uptrend.

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