The elements of trading the pattern
The pattern starts (with 0) at the beginning of a long price move
After 0 has formed, an impulse reversal at X, A, and B should have a 113 to 161.8 percent extension
The projection off of AB has a 161.8 percent extension requirement to C. C can extend beyond the 161.8 percent extension but not beyond 224 percent.
D is the 50 percent retracement of BC and is same as AB
The reciprocal AB=CD is needed
The pattern starts (with 0) at the beginning of a long price move
After 0 has formed, an impulse reversal at X, A, and B should have a 113 to 161.8 percent extension
The projection off of AB has a 161.8 percent extension requirement to C. C can extend beyond the 161.8 percent extension but not beyond 224 percent.
D is the 50 percent retracement of BC and is same as AB
The reciprocal AB=CD is needed