Here's something that I created (initially for myself) some time back, that was found useful by those I shared with in one of my Skype groups recently. As I haven't done a blog for a while (been working on a nice little project) I thought it might be useful to share it here as well.
WAVE 1 ….
Starts after a Wave 5 or Wave c of the zigzag has completed
WAVE 2 ….
Usually formed by sellers who aren’t awake to the fact that an uptrend is in progress (or vice versa)
Never pulls back beyond the start of Wave 1
Usually (about 75% of the time) retraces between 38.2 and 61.8% of Wave 1; rarely more than 61.8%
WAVE 3 ….
Usually the largest of the 5 waves, with greatest volume, steep climb and supported by fundamentals
Often reaches 1.618, or longer, extension of Wave 1.Never the shortest of the 5 waves.
Usually formed by traders taking profits
Will be different to Wave 2 – if that was simple (e.g. zigzag abc), Wave 4 will be complex (e.g. sideways correction in a flat triangle)
If the current wave can’t be determined, from all the up and down action, it’s probably a Wave 4
Usually takes longer to complete, than a Wave 2
Usually retraces between 38 and 50% of Wave 3 and seldom goes beyond the top of Wave 1
WAVE 5 …
Less volume and momentum than Wave 3, giving divergence between price and the eWaves histogram (except in a truncated Wave 5 where the price fails to go higher than the Wave 3)
Usually ends between the Fibonacci Expansion level of 61.8% and 100%, calculated from the start of Wave 1, to top of Wave 3, to bottom of Wave 4. Using the same measurement for the 5th Wave of the 5th Wave can give a more accurate target.
Snorm trades only with GKFX and has no hesitation in recommending them, for tight fixed spreads and quick execution (even during NFP, from personal experience).
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