Market on corrective phases usually respects the 4 fibonacci golden zones which is 0.38 / 0.50 / 0.618 / 76.8, most wave traders like 50 – 76.8 as it offers high R/R( risk- reward ratios). Alot of times it is followed by a 3rd so the its one of the waves that every trader wants to be in.
The market has three phases ( motive – correction – motive ) ,we have two types of motive waves ( impulse/diagonal ) . Motive waves will always be followed by a correction move. Note* wave 2 is never a it can be any other corrective pattern ( Flats / / double correction / triple correction ).
How the wave principle works is very fascinating it have rules which guide us to be on the right track of the market. So the are several rules to keep in mind ( – wave 2 is never 100% of wave 1 / – wave 4 and 1 never overlaps / – wave 3 is never the shortest wave compared to wave 1 , 3 ,5 / – motive waves are nomally labelled with numbers ).
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