Gartley 222 Pattern #3
1. The swing down from point A will terminate at point D. This will be at the .618 or .786 retracements 75% of the time. The other 25% of the time, the retracements will be .382, .500 or .707.
2. There must be an AB = CD pattern observed in the move from A to D.
3. The BC move will be .618 or .786 of AB. In strongly trending markets expect a .382 or .500 retracement.
4. Analyze the time frames from point X to A and A to D. These time frames will also be in ratio and proportion. For example, the number of time bars up from point X to A is equal to 17 bars. The time bars from A to D equal 11. Seventeen is approximately 1.618 of 11.
5. There will be a few instances where the AB = CD move will give a price objective at point X. This will be a true double bottom formation.
6. If point X is exceeded the trend will continue to move down to at least 1.27 or 1.618 of the X to A move.
