The starts at the 0 point, representing an extended down leg to begin the pattern at
X. The initial point X acts as the low of this prior substantial decline. After a quick reactive
bounce to the A point, the structure abruptly continues the decline, only to find support slightly
past the prior low at X. This is the failed wave 3 or wave 5 – in terms – that
establishes the rest of the structure. However, the important limits from the Trading
perspective requires that this X, A extension be at least a 1.13 but not greater than a 1.618.
After that impulsive failed wave is established, the BC leg rallies to at least a
of the AB length but it does not exceed 2.24. Again, this tight range of 1.618-2.24 is a
defining element of the structure. If the 1.618 limit is not reached, the structure is not a valid
After the BC leg has reversed from that zone, the is measured from
the B point to the C point. In addition, the Reciprocal is projected from the C point
(an equivalent length of the AB leg) to compliment the Potential Reversal Zone (PRZ). It will
take some time to begin to identify this structure but the obvious characteristic is the failed
down wave followed by a precise 1.618-2.24 extension. At that point, it is important to
calculate the level with the Reciprocal and study the price action in
Looking to buy @ 1.4660 For TP1 and TP2.
Good luck !