Lesson 2 of 8
View the price in waves movements.
With this pull, you need to use 3 pivots on a chart.
E.g: From the start of the impulsive wave to the top of the impulsive wave to the bottom of the retracement wave.
This tool works really well in combination with EW theory.
I use this tool a lot in combination with horizontals mostly.
Very effective for TP levels on trades that were taken based on Fib retracement.
Strongest fib. level:
– 1:1 extension
– 1.618 extension.
Try to use this tool in favor with trends.
If price is not even extending to 1:1, this might be an early indication of losing the whole trend.
This tool can be used as a possible resistance in ATH market.