{"id":4121,"date":"2020-05-14T15:52:19","date_gmt":"2020-05-14T12:52:19","guid":{"rendered":"https:\/\/roboforex.com/blog\/?p=4121"},"modified":"2026-05-26T10:57:30","modified_gmt":"2026-05-26T07:57:30","slug":"gartley-butterfly-pattern-indicator-and-trading-strategy","status":"publish","type":"post","link":"https:\/\/roboforex.com/blog\/blog\/2020\/05\/14\/gartley-butterfly-pattern-indicator-and-trading-strategy\/","title":{"rendered":"Gartley Butterfly Pattern: Indicator and Trading Strategy"},"content":{"rendered":"\n

In this review, we will discuss a well-known trading pattern - the Gartley Butterfly. You may learn to find this pattern on the chart by yourself or use the ZUP indicator, specially created for finding and drawing the pattern<\/a> on the price chart.<\/p>\n\n\n\n

<\/span>Pattern history<\/span><\/h2>\n\n\n\n

The Gartley Butterfly pattern<\/strong> appeared as long ago as 1935 thanks to a famous analyst and tech analysis<\/a> expert Harold M. Gartley<\/strong>. He specialized in stock market analysis, delivered lectures on tech analysis<\/a>, and consulted Wall Street traders. In the end, Gartley's tech analysis study course turned into a book called \"Profits In the Stock Market<\/strong>\", where he first described a pattern that was later named Butterfly.<\/p>\n\n\n\n

The Gartley Butterfly became popular a bit later, at the end of the 20th century. Gartley's works were improved by his followers Scott M. Carney and Larry Pesavento. The latter added the Fibonacci levels to the Butterfly to define and classify patterns<\/a> more precisely. A Gartley Butterfly with perfect Fibo<\/a> proportions is called the Pesavento Butterfly.<\/p>\n\n\n\n

<\/span>Gartley Butterfly pattern description and trading method<\/span><\/h2>\n\n\n\n

The Gartley Butterfly belongs to harmonic trading patterns - the ones which form by a certain scheme including Fibo levels. The pattern consists of four price movement sections (waves), the second, third, and fourth ones being, in essence, a three-wave correction of the first movement. The pattern got its name because its lines and Fibo levels on the chart look like a butterfly's wings.<\/p>\n\n\n\n

The Gartley Butterfly forms on different timeframes; quite often, it acts as a trend continuation pattern for the actual trend on a larger timeframe<\/a>. The pattern works well with other tech analysis instruments: trendlines<\/a>, support, and resistance levels. If the pattern forms according to the Fibo relations singled out by Pesavento, it will work off more probably, however, even without them, the pattern is trustworthy.<\/p>\n\n\n\n

<\/span>Bullish Gartley Butterfly<\/span><\/h3>\n\n\n\n

A bullish (buying) pattern looks like an ascending price impulse XA followed by a three-wave correction AB-BC-CD. The pattern roughly looks as follows:<\/p>\n\n\n\n

\"Bullish<\/a>
Bullish Gartley Butterfly<\/figcaption><\/figure>\n\n\n\n

The stages of pattern formation:<\/p>\n\n\n\n