The pattern structure was further refined using specific Fibonacci levels by Scott Carney which he outlined in his book 'The Trader', published in 1998.
The must include an pattern to be a valid signal. In general, the Pattern will possess an extended CD leg that is 127.2% or 161.8% of the AB leg.
This 1m entry is the final confirmation of a system of analysis across multiple time frames.
1. Point B is at the 78.6% retracement of XA.
2. Point B extends beyond the 38.2% retracement of AB but does not exceed point A.
3. Point D extends beyond 161.8%, potentially up to 261.8% to form point D.
4. Entry at the 127.2% extension of XA with a Stop loss at the 161.8% extension of XA.