STEP 2- Once the wave 2 is completed use Fib Extension to find out the possible wave 3 level. Usually wave 3 is 1.618 of wave 1 or 2.618 of wave 2.
STEP 3 - Once the wave 3 is completed then you can draw a line to join 1 and 3 and then draw a parallel line on wave 2 to project the wave 4. Usually wave 4 is 0.5 - 0.618 of wave 3
STEP 4 - Once wave 4 is completed then you can draw a line to join wave 2 and 4 and then remove the previously drawn line joining wave 1 and 3
STEP 5 - Then draw a parallel lines from wave 1 and 3 and the 50% of the above parallel lines to project wave 5. Usually wave 5 is 1 or 0.618 of wave 1
Hi surangadesilva, can you clarify something for me please- I am stuck on Step 3, the projection of Wave 4.
I drew a line, A, from 1-3 and placed a parallel line on 2. How do you use that line?
I tried a few different ways and found that a line exactly the same length as the line from 1-2, and parallel to it, lands within the 0.5 - 0.618 zone for 4. But I am not 100% sure this was the intention of the step?
See more info from the training video i have used: https://snag.gy/MzjubK.jpg
And more info here: http://countingpips.com/2016/09/how-to-draw-trend-lines-with-elliott-wave/ (note that their wave 5 channeling method doesn't include a middle line of wave 1 & 3)
Hope this helps
I can't see yet what boundary this line is providing. After applying the fibo limits (and obviously the zone can't be any further 'West'- don't know the correct terminology yet- of the candle at Wave 3 end), there is only one boundary left to close of the rectangle where Wave 4 will end- the 'Eastern' most one.
Thanks again and I will more than likely be requesting to pick your brains many more times!
1) Use the channel tool
2) Use the 2 points to connect the end of wave 2 with the end of wave 4
3) use the 3rd point to the end of wave 1 so you search for wave 5 end
Usually the over-throw of the channel happens on wave 3 unless the structure meets some guideline that suggests the over throw will happen on the 5th wave ( for example underthrow of the second wave or sideways action of wave 4 of a lower degree near the top channel resistance)