Gartley 222 Pattern #6

Gartley 222 Pattern #6

1. The time frame between point X and A will be between 5 and 13 time bars (i.e., 5 min., 30, or daily). On rare instances 21 time bars.

2. There are usually no swing patterns present between points 1 and A.

3. When the move from X to 1 is very explosive, the pullback to point A may only retrace to 38.2% or 50% of IX. 4. If the price difference between the .618 and .786 retracement is greater than the trader is willing to risk, the trader should wait for further confirmation (i.e, change in momentum or candlestick pattern; doji or hammer). In the S&P 500, for example, if the difference between the .618 and .786 is greater than 170 points I will wait for further confirmation to enter the trade.

5. The time bars between points X and A give a strong clue to the next swing. When the distance from point A is very short, 3 to 5 time periods, the next swing will be explosive to the upside. If the time frame down from point 1 to A is longer than 8 periods, the ensuing rally will most likely not be as strong.

6. The trader will never know which of the retracement numbers the market is going to reach. It is the trader's decision to determine how much risk is in the trade.
7. This pattern forces you to trade with the short term trend. You are not trying to pick a top or bottom.

8. After entry, once prices move 61.8% in the direction of the trend, the protective stop should be moved to point A. This gives a risk free trade.

9. The minimum price objective should be the same distance as point X to 1.