Gartley Pattern Touch Binary Options Trading Strategy

The Gartley pattern, also known as the XABCD pattern, uses the Fibonacci numbers to present clear points where we expect price action to attain. These are at points X-A-B-C and D.

After price attains point D, it reverses in a direction opposite that of the initial move from X to A. This strategy is a Touch trade strategy and will require the use of the Gartley-pattern.ex4 indicator.

Chart Setup

MetaTrader4 Indicators: Gartley-pattern.ex4 (custom indicator).

Preferred Time Frame(s):  15-Minutes, 30-Minutes, 1-Hour, 4-Hours, end of day.

Recommended Trading Sessions: The strategy can be traded any time the signal appears.

Assets Traded: Any

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Download the Gartley Pattern Touch Binary Options Trading Strategy

Trade Example (Click the image for full view)

Gartley_Touch_NoTouch_binary_options_strategy

Strategy

The Touch/No Touch trade is offered on several platforms and this is the trade to be offered with this strategy.  The Gartley-pattern.ex4 indicator will trace the Gartley pattern when it appears. Whether the pattern traced is bullish or bearish will not matter here. What matters is to identify the pattern and trace it accordingly.

The direction of price action from point D is always known. It is in the opposite direction from the price move from C to D. So the trade strategy is to await the appearance of the red box at point D, look at the Touch strike price the broker has given for the trade and decide if the price action from point D will touch this price or not touch it.

TOUCH ENTRY RULES

Allow the gartley-pattern.ex4 indicator to trace the Gartley pattern completely. When the red box forms and the price candle touches point D, look at the strike price available for the Touch/No Touch trade and make the following determination:

  1. Is the strike price located along the expected price path from point D?
  2. The price path is a reversal of price move from C to D. If strike is located along the pathway of price from point D, then select the TOUCH option.

From the chart above, we can see that if the strike price was 1.4501. This is along the expected price path for the Touch trade and so the logical option to choose would be TOUCH.

Expiry: A longer expiry will favour a profitable end to the trade. So ensure that the expiry for the Touch trade is at least 4 candles in length. A longer expiry allows the trade enough time to perform. The chart above is a 1 hour chart, so expiration should be set to at least 4 hours. For this trade, the trade objectives were met in 2 hours.

NO TOUCH ENTRY RULES

The No Touch is the opposite of the Touch trade. Allow the gartley-pattern.ex4 indicator to trace the Gartley pattern completely. When the red box forms and the price candle touches point D, look at the strike price available for the Touch/No Touch trade and make the following determination:

  1. Is the strike price located opposite from the expected price path from point D? The price path is a reversal of price move from C to D.
  2. If in a bullish Gartley pattern, the strike price for the Touch/No Touch trade is located BELOW point D, this is away from the expected price path and the trader should choose “No Touch”.
  3. Similarly, if in a bearish Gartley pattern, the strike price for the Touch/No Touch trade is located ABOVE point D, this is away from the expected price path and the trader should choose “No Touch”.

For the example shown above, we have a bullish Gartley pattern. If the strike price set for the trade was 1.4480, this would be located below point D and away from the expected price path for the trade. Therefore, we would expect to have a No Touch as the logical option to choose.

Expiry: A shorter expiry will favour a profitable end to the trade. So ensure that the expiry for the No Touch trade is not more than 2 candles in length. The time frame of the chart is the length in time for one candle to form completely, so this should guide the trader in setting the trade expiry time.

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Download the Gartley Pattern Touch Binary Options Trading Strategy

About The Trading Indicators

The Gartley_pattern.ex4 indicator has been created to help delineate this pattern when it forms on the charts. By automatically detecting and plotting the 5 key areas on the charts, traders can just focus on the key points and set the trade entries and exits accordingly.

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