The Butterfly & Gartley Method

This one and it’s offshoots are in the generic trading community and you’ve more than likely come across it already .

You may even use it, you may have seen it and discounted it and you may have tried it and given up – Let me show you how to use it properly – The Hovis Trader way.

In the 1930’s a book was written by a man called Gartley – on page 222 he showed a trading set-up that has now become known as the Gartley 222 method – It also has variations to it.

I am certain the web is full of detail on this method, so I’m not going to explain all the traits of the set-up, if you want to that is up to YOU to do – link at the end.

Depending upon the price activity and form of the set-up it can be known as a BAT, CRAB, BUTTERFLY or straight-forward Gartley 222 pattern

The purpose of this post is to show you how I use this set-up method in my trading, as It’s not as the trading method was created (although I do trade the BULLISH trades when I see them)

Now the whole point of the set-up is to identify the ENDING part/zone and then prepare to take trades in the OPPOSITE direction (As usual Charts will detail content), to catch the longer term trade reversal.

The problem is this does not always happen! As this is trading, it does not happen 100% of the time I’m afraid!

However, if the set-up sets up, then the market offers you a chance of playing the game in the run-up to the target zone! THIS is my PREFERRED way to trade these BEFORE price action reaches the target zone!  I did say at the start that I’ve put my own mark on this method!

There’s time when I’ve reviewed a market, decided to trade it and THEN I’ve noticed that it’s in a Gartley/Butterfly position!  When you trade pullbacks this will happen as a natural process of trading pullbacks!

Now I know in the charts below some of the set-ups aren’t exact proper Gartley and Butterfly methods – I use my knowledge to trade when I see similar formations – I don’t work strictly to the exact methods – If this is new to you I would suggest that you do stick to the exact methods.

I only trade long, so I only take trades on potential BEARISH Gartley’s and I get in at point B and point C for Butterflies (see chart below) and point c for BULLISH Gartley’s

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http://harmonictrader.com/blog/2013/08/03/gartley/

Now If you’ve invested £20 into Robert Miners book “high probability trading methods” you will notice that these methods ALL fit within his fib price ratios for an Elliott Wave ABC corrective pattern – so you could just use Miners ratios and the ABC and you WILL pick these set-ups up naturally – keep it as simple as possible.

For the sake of £20 – I would urge you to get the book, read it, put it away for a few weeks, read it again, put it away and 1 week later get it out again, read it and test the methods on the market – thinking all the time about market form and reactions – If you focus on Elliott wave exactness then you will drive yourself insane, just apply the basic methods and you’ll win.  The methods in that book allow you to WIN even when WRONG on the formation forming!  In my opinion the book and Ganns basic methods are the real holy grail in the markets

I don’t care whether it’s a Bat, Gartley, Butterfly, Shark or a dog – all I’m bothered about is, Is it a high probability trading opportunity that if it works out as expected then makes me 3R+

Do not get hung up on these fitting perfectly – If you’re trading LONG – then you want to get in at the lows and see if the move works out as expected.

Disclosure:  I do refine my trades to increase the probability, which is NOT shown on the charts above, but if you own Miners book – HPTM – then you’ll of read it in there. This blog is for INFORMATION purposes only – trade at your OWN risk

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