The pattern is the primary structure that precedes a formation. This structure is outside the typical M and W framework. It possesses a unique formation called an Extreme Impulse Wave that retests defined while converging in the area of the – 113% extension of XC.
In all cases, the completion point must include the powerful 88.6% support/retracement as a minimum requirement. In addition, the unique extreme Impulse Wave employs a minimum 161.8% extension of the BC leg.
This combination with the defines a unique structure that possesses two profound measures to define the minimum level. In many cases, the price action will retest the initial starting point of the pattern and define excellent opportunities to take advantage of a market that has moved to far too fast within a limited period of time.
This pattern frequently defines excellent opportunities but these reversals are often sharp and require specific management strategies to capitalize on the phenomenon. In many situations, the price action will retest the prior level and typically result in a limited counter trend move.
Now the (1H) has reached beyond TP1 for the first entry, I expect price to retest the neckline for the second more conservative entry.
I will use this pattern long entry to cover (hedge) my remaining short position from the .
The target for the falls within the zone for the second entry.
As the preceding low to the one I set the X point for also fits the correct measurements for the pattern.
I would advise extreme caution trading this pattern, especially if not as a hedge to an already profitable trade.