Learn something that I did this week.
There was this rally where you would think it had to be impulsive, because of its powerful nature, and you would put numbers on the waves, and you would be… wrong.
See, my initial reaction was that wave 5 would come next, or wave 5 got somehow absorbed, etc.
The first problem here is that both a Wave A and a Wave 1’s mo was identified as a 0M. Further adding to this was the fact that price crossed over the E-67 band, which would push your thinking more towards a Wave 1.
The third problem was the shallow pullback to 1 sd beyond the 62LR line. Surely that had to be Wave 2 – not.
The fourth problem is looking for an absolute extreme for a Wave B ending instead of a 14-sample lowest low / highest high and that it ended 1sd out, not at the 62LR.
The proper wave count was of course corrective.
C in fact was so powerful, that it blew past the 3-DAY ATR reversal zone of a normal Wave 3, which capped out at 1.1654.
Having a corrective wave structure at hand, your mind can be more relaxed instead of having to anticipate a beat beyond a Wave 5. This ABC was the wave 5. Now we have a missing beat to contend with on the other end, below 1.1524.
By the way, the 4-hour Wave 2 & Wave 4 continuation divergence was picked up correctly by the Overdrive240 routine.
Besides these new findings, now I’m starting to apply the new wave-id principles on the daily chart as well & keep on updating the Wave id list that I posted in my Taper Harley blog entry.