Constructing a Gartley from wave retracements

Build the Gartley in stages

A gartley-construction is a five-point XA-AB-BC-CD assembly. It becomes a long or short completion only after each required ratio band is met. The elliott-wave labels are the working set for the impulse-plus-correction sequence, so each new pivot can be checked before the next ratio is applied.

The impulse-leg is the opening directional swing XA. Later Fibonacci retracement measures, and the overall XD measure, are taken against that range. The corrective-sequence is the alternating AB, BC, and CD reversals that complete the five-point wave after the impulse.

There is no pattern until A reverses

There is no pattern until A reverses. Point-x is a prior pivot chosen among earlier swing lows or highs so XA can later produce a valid B. B itself is not locked until price actually reverses there.

After B, continue if the AB/XA Fibonacci retracement falls near 57% to 67%, or at worst no deeper than 78.6% of XA. A pullback beyond 78.6% of XA is treated as a failed construction.

Admit later swings only inside the bands

The construction uses only four Fibonacci ratios: the successive-number limit 0.61804, its reciprocal 1.61804, and their square roots 0.786 and 1.27.

After the impulse-leg XA, AB is ideally 61.8% of XA. That first pullback is the ab-band: ideally near 0.618 of XA and still acceptable down to 0.786 of XA. BC is 61.8% to 78.6% of AB. That rebound is the bc-band, and it is measured in price, not line length. CD is a 127% to 161.8% Fibonacci projection of BC, which is the cd-band.

A Fibonacci retracement is a measured pullback of one completed price range. It is used to test AB versus XA, BC versus AB, and XD versus XA. A Fibonacci projection is an extension of a completed range. It is used to place the expected CD band from BC and the initial-target-dt from CD.

Treat D as a cluster of estimates

D is the completion trigger. The first DT objective is 61.8% of CD; that print is the initial-target-dt. Overall XD is ideally 78.6% of XA, which is the xd-ideal, the overall A-to-D pullback against range XA. CD is ideally equal to AB, which is the ab-equals-cd check.

The d-cluster is the group of independent D estimates from the CD projection band, the ab-equals-cd copy, and the 0.786 XA retracement.

A worked bullish completion

In the worked bullish example, XA is 60, AB is 37 (ratio 0.616), and BC is 28 (ratio 0.756 of AB). Both retracements stay inside their bands.

That example then clusters three D estimates at 67.84, 69, and 70.44. Actual D is 68.8, AD/XA is 0.77, CD/BC is 1.328, and the first T prints at 91.79.

Bearish inversion and simpler arithmetic

The same ratio stack is inverted for a bearish completion. That bearish-inversion applies the bands to a downward impulse and produces a short completion at D.

Arithmetic may be simplified with fifty-cent-rounding. The shortcut drops cents and replaces 61.8%, 78.6%, and 161.8% with 62%, 79%, and 162%. The archive also calls this the 50-cent rule.

Judge validity by price-range ratios

No single absolute retracement or fixed go/no-go tolerance is given. Chart angles are time artifacts, and only price-range ratios decide whether the wave remains valid.