Below, I posted an alternative chart with 1.27 and 1.618 2-3 fib retrace. Thank you @knock for the helpful suggestion.
Here is more information about the
The Wave's Psychology
Bill suggests that the is a naturally occurring , found in all financial charts, all of the time. This suggests that there's no psychology behind it. If you want to get to grips with the psychological mindset of the market, then other will have to be utilised. For instance the use of , and price action may be useful in understanding the market's psychological state. Of course, Bill and his disciples would be against the use of additional indicators, as suggests that the stands alone in it's methodology. The choice is yours...
The key points of The
Below I've listed the key points traders look for when identifying the pattern, developing it and eventually playing it
*A channel is formed by waves 1 to 3 - points 1, 2, 3 & 4
*There should be regular timing intervals between waves (showing symmetry).
*Waves 3 and 5 are usually 127% and 162% Fibonacci extensions of the previous channel point.
*Point 5 is a move slightly outside the channel - A channel created by points 1 to 4. This move is usually a false price breakout. It's best to enter a market once price moves back within the channel (The false move doesn't always happen).
*The point after wave 5 is the target level. The target price is found by connecting points 1 and 4 and extending it. By using symmetry we can pin point this target.
*A will form a , i.e support will be broken to achieve target at 6 (PRZ).
*A will form a breaking upper resistance to achieve a target at point 6 (PRZ).
*Horizontal channels during consolidation periods mean the break can go either way.