It is the third most important trading pattern in series , called which is also frequently observed in markets. It is known as the most accurate and precise pattern among other .
The is made up of 5 swing points, X,A, B, C and D and come in and variations.
The has the following characteristics which can be used to identify the .
AB leg can retrace between 38.2% – 50% of XA leg
BC leg can retrace between 38.2% – 88.6% of AB leg
CD leg can retrace up to 88.6% of XA leg
CD leg can also be an extension of between 1.618% – 2.618% of AB leg
The is much similar to the 222 Pattern (link attached) where they share similar formation overall but differentiate when it comes to formation of XA Leg and CD Leg.
The pattern can be used in all markets and at any time frames with most accuracy.
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