- The first requirement for the pattern is a new low that exceeds the prior low( Point B and X)
- Point B should be within the range of 1.13 and 1.618. Shouldn't exceed of wave XA
- A rally should followe now, creating wave BC , where it should reach at least near the of wave AB, and can reach up to 2.24.
- A correction of wave BC should follow, the correction should complete wave CD at point D.
- Point D should be around 0.5 retracement of Wave BC . Thats the "Potential Reversal Zone" OR PRZ of the pattern
- This is not a place where you immediately Buy. Its a place to look for buy confirmation signals over the lower time intervals.
As you can see, the pattern on chart is still a potential pattern, and far from complete. So that doesn't mean that we should look to short now looking for a move to point D.
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