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The 1st Wave How To Trade It


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#1
Nouf

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This is simple

You don't know its ever going to be a 1st wave until a small 5 wave rally or decline, even then its suspected depending on where you think you would be in the next degree

So once you have a small 5 wave impulse, then you look for a retrace

How to trade it

If you suspect that you have reversed a trend and can label a small 5 wave impulse then you are looking for the retrace in 3 waves, the stop is at the origin of the 5 wave impulse

Its that simple, 5 waves in the direction of the reversal, followed by a correction against the initial 5 waves in 3 waves back to either a 1x1 or fibbo support at the 50% or 61.8 retrace levels

Now a 1st wave can also be [a] wave of a correction, the only way to have any real confidence if its a 1st wave and not an [a] wave is that if the suspected 3rd wave acts like a 3rd wave ie it starts to accelerate and get aggressive, thus leaving behind any 1x1 measurement where [c]=[a] and starts to act and feels like a 3rd wave, then you can be reasonably confident its a 123 and not a ABC correction


So to sum it up, you never really are trading a 1st wave as you are looking for the initial turn as you want to be able to control risk so once and initial 5 wave move is seen and you suspect a reversal then you have a point at which risk can be controlled which is the origin of the initial 5 waves, hence from there you can watch any retrace to confirm if a correction against the origin of the 5 wave move
To be there for the good times, you got to be there all the time - Ben Lichtenstein





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