P1: PIC/PIC c04
August 18, 2008
Printer: Yet to come
Beyond Fib Retracements
retracements. Once you are able to do this, you are set to be prepared for a corrective trend reversal for any market and any time frame. I have been making these trend reversal target zones for almost 20 years. We do it virtually every day in our daily DT futures, stock/ETF, and Forex reports on most of the major markets, from intraday to monthly data. Once you incorporate these Dynamic Price Strategies in your trading plan, you will be amazed at how often reversals are made at the trend and correction price targets that you have projected and for which you are prepared in advance. I’ve often had students over the years initially complain that it is too much work to make all the projections to identify the probable support/resistance and trend reversal zones. My answer has always been, “If you’re not willing to do the work necessary for the information you need to make a trade decision, you have no business with a trading account.” In recent years, wannabe traders have a distorted view of what it takes to be successful in the business of trading because of all of the trading software available and scam system sellers. No specific software or system will make you a successful trader. Powerful computers, comprehensive trading software, and inexpensive data have not made anyone a trading success. All that each of these can do is provide you with the information you need to make trading decisions more quickly and accurately. They will never be the cause of success. Only your own work, knowledge, and experience can result in trading success, the same as with any other business.
End-of-Wave-5 Target Zones As you learned in Chapter 3, a five-section trend is the most frequent trend pattern. Not all trends complete in five sections that meet the E-wave guidelines you learned in Chapter 3, but whenever four sections are complete, you should always anticipate the trend is likely to be complete once the fifth section is complete. Over the years, I have identified the key price targets where a Wave-5 is usually complete. It happens over and over again, as we demonstrate daily in our DT Reports, so be sure and make these projections and identify the narrow-range EOW-5 target zone whenever four sections are complete.
END-OF-WAVE-5 PRICE TARGET PROJECTIONS APP of waves 1 to 3 from Wave-4: 38.2%, 61.8%, and 100% APP of Wave-1 from Wave-4: 100% Ex-Ret of Wave-4: 127%, 162%, and 262% Ĺ The ideal target zone for a Wave-5 includes one projection from each of the three sets. Ĺ The order of importance of the three sets of projections is the 38.2% or 61.8% APP of
waves 1 to 3, the 100% APP of Wave-1, and the 127% or 162% Ex-Ret of Wave 4. Ĺ The 100% APP of waves 1 to 3 and the 262% Ex-Ret of Wave-4 are rarely met except for
commodity market ﬁfth-wave extensions.