Gartley, Bullish

Core idea

The bullish Gartley is a five-turn harmonic pattern (X-A-B-C-D) shaped like a big M with the right peak (C) lower than the left (A) — essentially an ugly double top that ends with a Fibonacci-anchored low at D, where price is supposed to reverse upward. The defining final filter: DA/XA ≈ 0.786 (within 3%).

Of the five bullish Fibonacci-based patterns Bulkowski studies, the bullish Gartley is the worst performer in bull markets by average rise after D. The breakeven failure rate is the worst in the bullish-harmonic family. The reversal rate at D, however, is 86-90% — high enough to make the pattern useful as an exit-timing signal for shorts or a proactive buy signal for swing traders who can take small moves.

Why the M-with-lower-C shape matters

The right peak being lower than the left signals that bulls couldn't reclaim the prior high — momentum is shifting from up to mixed. But the move from D to a new high is then constrained by overhead resistance at A. Most bullish Gartleys reach the price of B (closest target above D) — but reaching A (the peak of the pattern) happens less than half the time in bull markets and less than a third in bear markets. Set your expectations accordingly.

Why it matters

The bullish Gartley is the case study in why "reversal rate" alone doesn't make a tradeable pattern. 86-90% of Gartleys reverse at D — that sounds like a high-conviction long entry. But the typical post-D move is small enough that transaction costs, slippage, and the cost of being wrong on the 10-14% of patterns that bust eats the expected value. The pattern is best used as:

• Cover signal for short positions — high-quality "stop shorting here."
• Tactical entry inside a larger bullish thesis — buy at D, take partial at B, exit before A unless conditions improve.
• Educational example for understanding harmonic-pattern statistics — high reversal rate ≠ high tradability.

The topic also reminds readers of a recurring trap: a bullish pattern emerging from a long horizontal top is usually a bull trap, regardless of whether it's a double bottom, a cup-with-handle, or a Gartley. The pattern looks valid, but the structural context (distribution top) overrides it.

Key takeaways

Mental model

Copy sourceZoom

Practical application

Identification

Trading the reversal at D

Example

A regional energy stock prints these turns over five months: X at $9.50 (March low), A at $13.20 (June high — well-defined peak), B at $11.40 (July low — AB/AX = ($13.20-$11.40)/($13.20-$9.50) = 0.49, within Fibonacci tolerance of 0.5 ✓), C at $12.80 (August high — CB/AB = ($12.80-$11.40)/($13.20-$11.40) = 0.78, within Fib range ✓; also C < A ✓), D at $10.30 (October low — CD/CB = ($12.80-$10.30)/($12.80-$11.40) = 1.79, slightly outside 1.618 but close; AD/AX = ($13.20-$10.30)/($13.20-$9.50) = 0.78, within 3% of 0.786 ✓).

Valid bullish Gartley.

Context check: the stock's broader structure shows a clear uptrend from $7 (year ago) to current; no long horizontal top above. No bull trap.

Day 1 after D: price closes at $10.55. Day 2: price closes at $10.80 — confirmed turn upward.

You buy 200 shares at next open ($10.90), stop at $10.10 (~2% below D).

Primary target: B at $11.40 (wait — B is below D in this example; let me recompute). Actually, in the bullish Gartley, B sits between A and D (price-wise above D). With B at $11.40 and D at $10.30, B is indeed the closest target above D. ✓

Target: $11.40. Hit on day 9 — partial sale of 100 shares at $11.35 for $0.45/share = $45 profit. Modest.

Stretch target: A at $13.20. Price reaches $12.30 on day 21, stalls, retreats. You exit the remaining 100 shares at $12.10 (trailing stop at $11.50) — $1.20/share = $120 profit. Total: $165 on a $2180 cost basis (~7.5% in 3 weeks).

That's the Gartley's typical trade profile: a high-reliability turn, a small move, modest profits. Useful as part of a broader strategy; not a foundation on its own.

Related lessons