Wave 3 – Wave 5 Relationship

This is a valuable insight for those aiming to pin a reversal perfectly.

Let’s start with figure 1.

You can see, that as soon as a “3” identified, the “5” can be projected with high accuracy. On this image above there are two “3”-s, yes, for the first number 3 is the wave 3 of the Wave 3 whilst the second one is Wave 3 preceding Wave 5 – yet the distance is very similar.

These projection triangles are made of 4 pieces with the 3rd rung being extended and spelled out for good measure.

The third rung is 36 pips beyond the end point and the total triangle is 50, that is not expected to be reached. Guess where your stop would go.

The reason for the 4 slices has to do with the price’s long term Stochastics: these 3-s were printed in the last 10% of the long term range (shown by Comfort Levels Lucid), otherwise they would be only 3 slices.

The actual high was 1.20106 – which would had meant 8.6 pips accuracy for catching the top – and let’s not forget that you had 23 hours to place the order ahead of time.

The one that occurred on the downside recently had 3 slices, for it was not in the lower 10%. The second rung came into play at 26 pips out. The accuracy was 2 pips and it got its fill 68 hours down the road.

Not sure if you are learning something here, but I think I am. The last move up was an ABC move, and accordingly it did not come with a comparable Wave 3 and Wave 5. C is an even better location to defy the direction for it sets up a lower high (or higher low), but not nearly as predictable how far price shall get.

stoch is iStochastic(symbol,0,9,3,3,MODE_SMA,0,MODE_SIGNAL,i);

RSI2 is iRSI(symbol,0,2,PRICE_MEDIAN,i);

   ////3 up
   if (RSI2[i]>RSI2[i+1] && RSI2[i+2]>RSI2[i+1] && RSI2[i+1]<18 && RSI2[i+1]>5 && (RSI2[i+8]>90 || RSI2[i+9]>90 || RSI2[i+4]>90 || RSI2[i+5]>90 || RSI2[i+6]>90 || RSI2[i+7]>90) && stoch[i+4]>60 && High[i]>iMA(NULL,0,67,0,MODE_EMA,PRICE_HIGH,i)){
      while (j<i+14){
         if (RSI2[j]>RSI2[j+1] && RSI2[j+2]>RSI2[j+1] && RSI2[j+1]>RSI2[i+1] && RSI2[j+1]<56) break;

 ////3 dn
      if (RSI2[i]<RSI2[i+1] && RSI2[i+2]<RSI2[i+1] && RSI2[i+1]>92 && RSI2[i+1]<95 && (RSI2[i+8]<10 || RSI2[i+9]<10 || RSI2[i+4]<10 || RSI2[i+5]<10 || RSI2[i+6]<10 || RSI2[i+7]<10) && stoch[i+4]<40 && Low[i]<iMA(NULL,0,67,0,MODE_EMA,PRICE_LOW,i)){
      while (j<i+14){
         if (RSI2[j]<RSI2[j+1] && RSI2[j+2]<RSI2[j+1] && RSI2[j+1]<RSI2[i+1] && RSI2[j+1]>44) break;

These are part of Stochastic Combo w/ Divergences