The Origin of Harmonic Patterns: Meet Harold McKinley Gartley
Once upon a time, there was a brilliant trader named Harold McKinley Gartley. Back in the mid-1930s, he ran a popular stock market advisory service that stood out from the crowd. Why? Because it was among the first to apply scientific and statistical methods to study market behavior.
Gartley claimed he had finally cracked two of the biggest challenges traders face:
What to buy—and when to buy it.
Eventually, traders noticed that his pattern-based approach wasn’t just useful for stocks—it worked across various financial markets. Since then, books, trading software, and countless trading strategies have been developed based on Gartley’s methods.
The Famous “222” Pattern
The pattern Gartley is most known for is the “222” pattern—named after the page it appears on in his book Profits in the Stock Market.
This setup builds on the ABCD pattern you already learned, but it starts with a larger swing point (labeled X), forming a 5-point structure: X-A-B-C-D.
These patterns usually appear during a correction within a larger trend and often look like an M shape (bearish) or W shape (bullish) on the chart.
Traders use the Gartley pattern to identify high-probability entry points in the direction of the overall trend.
Bullish and Bearish Gartley Patterns
The Gartley pattern typically shows up after a strong price move (up or down) and signals a potential reversal. What makes it particularly reliable is that each turning point aligns with Fibonacci retracement and extension levels, strengthening the signal.
Spotting the pattern can be tricky at first, especially with all the Fibonacci levels involved—but the key is to break it down step by step.
The classic Gartley structure follows these rules:
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AB = 61.8% retracement of XA
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BC = either 38.2% or 88.6% retracement of AB
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If BC = 38.2% of AB, then CD = 127.2% extension of BC
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If BC = 88.6% of AB, then CD = 161.8% extension of BC
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CD = 78.6% retracement of XA
The Animal Kingdom of Gartley Variations
Over time, traders built on Gartley’s work and introduced new variations—many of which were given animal names (don’t ask why, maybe they were just hungry). Let’s take a look at some of these “mutant” patterns:
🦀 The Crab
Discovered in 2000 by Scott Carney, a big believer in harmonic trading, the Crab pattern is known for its extreme reversal zone, giving it one of the best reward-to-risk ratios among all harmonic patterns.
That’s because traders can place tight stop-loss orders near the potential reversal point.
The ideal Crab structure looks like this:
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AB = 38.2% or 61.8% retracement of XA
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BC = either 38.2% or 88.6% retracement of AB
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If BC = 38.2% of AB, then CD = 224% extension of BC
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If BC = 88.6% of AB, then CD = 361.8% extension of BC
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CD = 161.8% extension of XA
🦇 The Bat
In 2001, Scott Carney introduced another harmonic pattern—the Bat.
This one is defined by a deep retracement of 88.6% of the XA leg and is known for its reliability in spotting price reversals.
The Bat pattern’s structure is:
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AB = 38.2% or 50.0% retracement of XA
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BC = either 38.2% or 88.6% retracement of AB
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If BC = 38.2% of AB, then CD = 161.8% extension of BC
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If BC = 88.6% of AB, then CD = 261.8% extension of BC
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CD = 88.6% retracement of XA
🦋 The Butterfly
Finally, we have the Butterfly pattern, created by Bryce Gilmore.
Just like its namesake, this setup can lead to beautifully large price moves—if you catch it right. It’s a more aggressive pattern, often signaling a reversal beyond the starting point (X).
The Butterfly pattern follows these characteristics:
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AB = 78.6% retracement of XA
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BC = either 38.2% or 88.6% retracement of AB
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If BC = 38.2% of AB, then CD = 161.8% extension of BC
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If BC = 88.6% of AB, then CD = 261.8% extension of BC
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CD = 127% or 161.8% extension of XA