As mentioned in every book or article on theory one should start labeling from an important low or high,hence i have taken covid lows for reference.I have tried to follow impulse labeling rules given in theory and have labelled degrees according to time frame given in the books or in the material available online.
Reasons for impulse wave counts:
1)Primary wave 2 has not retraced primary wave 1 by more than 100%
2)Primary wave 3 has extended almost 261.8% of Primary wave 1
Current wave counts
Cycle : wave 1
Primary : wave 4
Intermediate : wave C
Minor : wave 5
Primary wave 4 Regular Flat ABC correction(3-3-5)
Logic for between 284-266
1) Price support @ 284
2) 100% Extention of Intermediate wave A from wave B top @284
3) of primary wave 3 @ 269
4) 123.6% Extention of Intermediate wave A from wave B top @266
5) seems to be making positive divergence
1)Look for reversal candle like , ,Piercing, pattern in the target zone marked for Primary wave 4
2)Next day price should cross the high of the reversal candle during the trading hours and should sustain above it through out the day(Take 30% position when it crosses the high),if it manages to close above the high of reversal candle then take rest of the 70% position.Additional confirmation will be of minor 2-4 trendline breach and price closing above minor wave 4 highs and 10 day .
3)Keep a SL of reversal candle low on closing basis and size your trade accordingly in order to not to loose more than 1% of your trading capital
4)Target zone for primary wave 5 is 357-380,as it is primary degree that we are expecting to unfold price might take 2-3 months to hit the target zone.
This post is for some one who is interested in trading stocks or indexes through theory.I have tried to show how to label waves of different degrees and have mentioned trade setup that one should look for and have also mentioned position sizing logic.
Hope anyone reading this post find the information useful.