We have been positing a number of Gartley reversals in recent days and today isn’t shaping up to be any different with one forming up on the hourly chart of the copper price traded in New York.
The thing about this type of setup is that it looks for a very specific reversal that occurs in a counter-trending movement. The ones that we post will tend to be looking for a reversal to occur at or very near a Fibonacci cluster level.
As you can see here the price has performed a series of price waves and found resistance just below the 382 mark which is where the lower of the two Fibonacci clusters has occured. Typically the high of the candle touching the cluster (or just the far side of the cluster level) will form the usual position of the stop loss.
The entry is usually done once the price candle closes below the low point of the highest candle (mentioned in the previous paragraph). This way you are getting a degree of confirmation that a reversal has indeed occured whilst trying to preserve a good risk/reward ratio.
Targets can be used for profit taking or stops trailed depending on the preferences of the trader. See some of our previous blogs looking at this type of setup for more details.
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All the best,