Detailed scenario planning for wave (4) and wave (5) after wave (3) completes. Includes specific Fibonacci targets and entry/stop placement.
Description
This entry covers the practical scenario planning process after wave (3) is confirmed complete, including specific Fibonacci levels for wave (4) and (5) targeting.
Steps
- STEP 1: Confirm wave (3) completion: 5-wave structure complete, momentum divergence, channel line reached.
- STEP 2: Wave (4) correction depth target: Previous 4th wave zone of wave (3)’s internal structure. Fibonacci 38.2% of wave (3) is also a common guideline.
- STEP 3: Enter long (in an uptrend) as wave (4) approaches its target zone. Stop below wave (1) end (overlap rule boundary).
- STEP 4: Wave (5) target: if wave (1) ≈ wave (3), then wave (5) ≈ wave (1) from wave (4) end. Or 0.618× (wave 1 start to wave 3 end) from wave 4 end.
- STEP 5: Exit before or at the wave (5) target. Watch for throw-over, volume divergence, or oscillator divergence as exit signals.
Key Points
- Wave (4) target: previous 4th wave zone (sub-wave 4 of wave 3’s price range)
- Wave (4) stop: just below the end of wave (1) — overlap would violate Rule 1
- After wave (5) completes, expect a significant correction of the entire impulse
