The Gartley 222 is a classic chart pattern used to identify potential market reversals during corrections.
Babypips offer a simple exlainer on how it’s built from five key points labeled X-A-B-C-D and follows precise Fibonacci ratios.
Here’s how it works:
- The pattern starts with a move from X to A (usually in the direction of the trend)
- Then comes a retracement to point B, ideally around 61.8% of XA
- The market rebounds to point C, often retracing 38.2% or 88.6% of the AB leg
- Finally, it completes at point D, which should land around 78.6% of the original XA move
When all legs align with these Fibonacci levels, traders look to enter at point D, anticipating a reversal back in the trend’s direction.
Stops are placed just beyond D, and targets are often set at prior levels like B or A.
Over time, traders introduced variations like the Crab, Bat, and Butterfly patterns. These follow the same basic shape but tweak the Fibonacci levels and extension targets. Each version aims to improve accuracy or risk-reward based on how price tends to behave at turning points.
