The Gartley Patterns MT4 Indicator is a trading strategy for the forex market which is based on Fibonacci retracement numbers as described by H. M. Gartley in his 1935 book, Trading Chaos. This is a reversal trading strategy because the direction of the asset traded is in the opposite direction to the original trend.

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Two versions of the Gartley patterns exist:

• The “W” version which is the bearish version. This pattern is preceded by an uptrend and ends with a downward reversal.
• The “M” version which is the bullish version. This pattern is preceded by a downtrend and ends with an upward reversal.

The pattern is made up of Fibonacci numbers and has five points: X, A, B, C and D. That is why it is sometimes called the XABCD pattern. The pattern starts at point X and ends at point D from where the defining trade is implemented. Identification and trace of this pattern has historically been a difficult task for traders, but the Gartley Patterns MT4 indicator has come to the rescue. It not only traces the pattern, but uses a distinct blue colour to trace out the pattern and finally, plants a box around the candle which marks the end of the pattern on the chart (point D). In some cases, an arrow also appears to indicate the direction of the trade. So all in all, this is a great indicator to use.  

Gartley Patterns MT4 Indicator Strategy and Trading Rules

The indicator is applied to the chart. When it appears, it could either be an “M” shaped Gartley pattern (buy) or a “W” shaped Gartley (sell). The pattern ends with an arrow which usually points in the direction where the trader is expected to set the trade. The trading rules for this pattern as shown by the indicator are as follows:

Gartley Patterns MT4 Indicator Short Trade Entry Rules

The short trade entry signal occurs when the following is seen on the charts:

• The Gartley Patterns MT4 Indicator draw a “W” shaped Gartley pattern, which is distinguished from the rest of the pattern by a blue colour.
• A red box appears around the candle which marks the end of the pattern at point D, showing the expected commencement of the trade.
• Once the candle marking the end of the Gartley pattern has closed, the trader should enter a SHORT trade at the open of the next candle.

A close look at the chart above shows that the indicator has drawn a blue coloured “W” shaped Gartley pattern. The candle marking the end of the pattern is shown and the trade area is also shown clearly. Stop Loss and Take Profit Settings The Stop Loss is set a few pips above the high of the candle which marks the end of the Gartley pattern at point D. The Take Profit point should be set at any point along the price path, guided by the nearest support and should be at least two times the stop loss distance in pips.

Gartley Patterns MT4 Indicator Long Trade Entry Rules 

The long trade entry signal occurs when the following setup is seen on the charts:

• The Gartley Patterns MT4 Indicator draw an “M” shaped Gartley pattern, which is distinguished from the rest of the pattern by a blue colour.
• A red box appears around the candle which marks the end of the pattern at point D, showing the expected commencement of the trade.
• Once the candle marking the end of the Gartley pattern has closed, the trader should enter a LONG trade at the open of the next candle.

Observe the chart closely. We can see the Gartley pattern clearly drawn and setup, with the red box and arrow indicating where the pattern ends at point D and the trade area. We can see that the expected upside reversal movement which is traded is already on its way. Stop Loss and Take Profit Settings The Stop Loss is set a few pips below the lowest price of the candle on which the red box at point D is encircling. The Take Profit point should be set at a point where there is a prior resistance, and should be at least two times the distance of the stop loss in pips. Precautions when trading with the Gartley Patterns MT4 Indicator The trader’s only precaution should be to allow the pattern to form fully, and to allow the red box to circle the candle where the pattern ends at point D. It is not necessary to master the Fibonacci ratios on which the pattern is based. Trades can also be protected with the use of a Trailing Stop, once the trade has significantly moved into profit territory.

Gartley Patterns MT4 Indicator Recommended Time Frames

Technically speaking, you can use this indicator for all time frames. However, the shorter the time frame, you will see more fluctuation and possibly more whipsaw which may cause small losses that can eat up your portfolio quickly. We recommend that you use higher time frames like the 4H for better consistency.

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Gartley Patterns Explained and Simplified Video Tutorial

Gartley Patterns Explained and Simplified Video Tutorial

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Gartley Patterns MT4 Indicator Download

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