Time has to be given 70% weight age and 30% to price
if price reaches it target is reached, and time is not over..Market will consolidate.
Next wave will start only when it breakout / breakdown 61% of previous wave.
Any New impulse wave starts when price has retraced back 61% of previous down move. It also means bottom is formed.
In such scenario, when sell on rise is over any dip is [Link] the market does not reach 61% , then its dead cat bounce.
Any time price goes above 161%,draw a trend line, we will consider a new wave has started only when trendline is broken
Don’t see patterns when you are finding waves
5 moves (sub waves) make 1 Wave
Don’t find waves (5 moves) in sub waves.
We will not count high and low if they do not form above/below previous wave
Important Fibo R value 0.816
Wave 1
Wave 1 starts when price has retraced back 61% of previous down move.
Draw Fibo R top to bottom
Wave 1 will have 5 sub waves
61% is achieved either in sub wave 1 or sub wave 3. Note:- before completion of wave 3 we will get 61% confirmation
Wave 1 Time Wave 1 = No time limit
Note: - Wave 1, Wave 3, Wave 5, one of them will have extension, if Wave 1 is normal, and wave 3 is 1.61% of Wave 1 then Wave
5 will go into extension
Wave 3
Wave 3 will be based on Wave 1. Draw Fibo R. on Wave 1, Top to bottom...this will identify Extension and see extension.
Wave 3 => 161% of Wave 1 or more
Wave 3 Time Wave 3 = Time Wave 1 + Time Wave 2
Wave 3 Time Wave 3 > Time Wave 1 + Time Wave 2
Extension
Wave 3 will have 5 sub waves
Wave 3 will form above Wave 1, cannot form below Wave 1.
Wave 3 equal or more than Wave 1. It cannot be less than Wave 1 (99% of cases).
Because of volatility 1% chances it will cause Wave 1 to greater than Wave 3
In such scenario, check for impulse (it has to have 5 moves)
One Wave will be 161% of other wave
ie Wave 3 = 1439 and Wave 1 should be greater than 1.61% * 1439 = 2316
Wave 3 can be 161% of Wave 1 or more.
If it’s more than 161% then we count as Extension
Once 5 sub waves are over and it’s in extension, then it will have 3 moves. If high is broken there will be 3 moves & so on
If 5 sub wave high is broken. It goes in extension which will be in 3 moves= total moves 8
In case high of move 8 is broken, we add 3 moves ie. 11 moves
In case high of move 11 is broken, we add 3 moves ie. 14 moves
In case, Wave 1 is normal, Wave 3 is 1.61% of Wave [Link] Wave 5 will go in Extension
In case of extension, Draw trendline from low of Wave 2 , if trendline is broken then exit(Wave 3) cos Wave 4 has started.
Wave 3 has to reach atleast 127%, before any correction.
Use time analysis to understand
Time wave 1 = 93 bars
Time wave 2 = 40 bars
Total = 133 bars
Time Wave 3 = Time Wave 1 + Time Wave 2
If time has not reached its target market should not fall. This will help in understanding how much longer it will not go down
Stocks can go in extension beyond 161%.
Wave 5
Wave 5 will form above Wave 3
Wave 5 is more than 1.61%
2 ways to calculate Wave 5
Wave 3 is less than 1.61% of Wave 1
Wave 3 is equal to and more than 1.61% of Wave 1
If Wave 3 is in extension then Wave 5 will not go in extension
Wave 5 Target will be based on Wave 1
Targets
Wave 5 (points)
Wave 5 = Wave 1 Wave 5 Target = Wave 1 (6078 points)
Wave 4 low(7511) + 6078 = Wave 5 Target (13581)
Wave 5 = 1.61% of Wave 1 6078 x161% =9785.58
Wave 4 low + 9785.58 = Wave 5 Target (17,296.58)
Wave 5 = 2.61% of Wave 1 6078 x261% =15863.58
Wave 4 low + 15863.58= Wave 5 Target(21,941.58)
Wave 5 = 3.61% of Wave 1 6078 x361% =21,941.58
Wave 4 low + 21,941.58= Wave 5 Target(29,452.58)
Wave 5 = 4.61% of Wave 1( does’t go ever) 6078 x461% =28,019.58
Wave 4 low + 28,019.58= Wave 5 Target(35,530.58)
Wave 2
Draw Fibo R. on Wave 1 from Bottom to Top
Wave 2 is a corrective wave - 3 moves - FAST
Wave 2 can touch 100% or 111% of Wave 1
Wave 2 will not touch 127% of Wave 1
if it goes more than 127% then it will be major correction
in case it goes to 111% , market will have a weak rally.
No low should form below Wave 2
Price can go in flat correction during Wave 2. Notice the low of the wave 2 is not broken. If high is broken then wave 3 will reach
161% of Wave 1
Time Wave 2 Time Wave 2 < Time Wave 1
Wave 4
Draw Fibo R. from 0 to Wave 3(Include Wave1, Wave 2, Wave 3)
Wave 4 is corrective wave
Wave 4 cannot form below Top of Wave 1
If Wave 4 goes below Top of Wave 1, be alert cos Wave 5 will be unpredictable. It will be a failure (it might not go above Wave 3).
Wave 4 can correct 0.23% to 0.382% to 0.50%
Wave 4 will not reach 0.61%
If Wave 3 is extended then Wave 4 will be shorter
Low of Wave 4 can be broken only after completion of Wave 5 (5 impulse moves)
Time Wave 4 Time Wave 4 = ½ of Time Wave 2 Time Wave 4 = 2 X Time Wave 2
Time A = 8 Candles so Time B = 4 Candles Time A = 8 Candles so Time B = 16 Candles
Once Correction is identified,
Draw Fibo R for the total impulse wave 0 - 5
1st Wave of any downside (ie. A or W) will not go below 61% of total impulse wave. (Can touch but will not go below)
(vibration can cause it to go below but there will be bounce back)
Note :- How to tackle if Wave B is completed or not and Wave C has started
Draw Fibo R from A to the highest point till now(B) , if now the downtrend crosses 61% it will confirm Wave C has started.
(If you buy at top then be alert at 61% as bounce can come)
ABC Correction
Wave A will not go below 61% of Total Impulse
Wave A will be in 5 moves
Wave B willl be max 50% of Wave A... (Draw Fibo R from Top to A). This will help in finding Wave B
Wave B will not cross 61.8% of Wave A
Wave B comes in 3 moves
Time Wave A > Time Wave B
Length of Wave C = 100 % of Wave A
ie. if Wave A =35 point ..then Wave C will be 35 points
or
Length of Wave C = 161% of Wave A (MAX)
Use Fibo Extn Tool to confirm ABC correction
Draw Fibo Extn from Top to A to midpoint (B)....This will give point C.
After Wave C is over we will see resumption of Original Trend.
Time taken to complete Wave A < Time to complete Total impulse wave
ie. Time for total impulse is 50 candles then Wave A will be less than 50 candles
Time Wave B
If 3rd wave is equal to Wave A then we have ABC
if Wave A =62 points then Wave C has to be 62 points. (start from B to calculate)
Wave A TimeWave A < Time to complete Total impulse wave
Wave B Time Wave B = ½ of Time Wave A Time Wave B = 2 X Time Wave A
(Time WA is not Time A = 8 Candles so Time B = 4 Candles Time A = 8 Candles so Time B = 16 Candles
equal to Time
WB)
Wave C Time Wave C = Time Wave A Time Wave C = 61% * Time Time Wave C = 161% * Time
(Time WA is not Time A = 8 Candles so Time C = 8 Candles Wave A Wave A
equal to Time Time A = 10 Candles so Time C = 6 Time A = 10 Candles so Time C = 16
WB) Candles Candles
if 3rd wave is not equal to Wave A then its not Wave C , it can be WXY or WXYXY
WXY and WXYXZ Correction
Wave Y will be based of Wave X
if 3rd wave touches 127% of X then we get WAVE Y (Draw Fibo R from W to X ..this will help in identifying WAVE Y
Double Correction is over only when price reaches a 100% to max 127%.
W, Y, Z comes in 3 moves (downwards move)
Wave X is dead cat bounce.. comes in 1 single move...sometimes 3 moves
Wave X will not be more than 61% of previous move
When Wave Y reaches 127%, we expect a bounce, this has to cross 61% of the down move (impulse wave).In case it doesn’t then
correction is not over. In such scenario his bounce has to be equal to X(read requirement of X2), in case it is now this WXY has
gone in extension
Time Wave W > Time Wave X
if it touches 127% of X then ...Double Correction is over Impulse move will start and price has to cross 61% of previous
downlfall(Wave Y)..
See impulse move after correction
If 3rd wave does not touch 127% of X (bounces before double correction is over) and correction is not over and it might be Triple
Correction
Both X will be of equal length (price wise)
X2 will not cross over X1
if X1 is 17% then X2 will be approx 14% to 19%(keep buffer)
X2 cannot be calculated based on Fibo R...
X2 should not have 5 moves nor it should not cross 61% of previous move...if 5 moves are there and it cross 61% then bottom has
formed.
Wave Z is based on Wave W
Target for Wave Z will be based on Wave W.
use Fibo Extn...Top to Y to X2
Wave Z will be a min 61% and max of 100% for Correction to complete
If any bounce happens before 61% then market will go further down
Since market / stock cannot go below 81%and Z if forming at 61% which is below 81% of impulse wave then in such scenario, if Z
does not touch 61% and reverses back see larger timeframe and see all 5 moves make a single move A...
now we will get B which is less than 61% of A then C
Fibo Retracement Tool – use if when we see previous data
Fibo Extension Tool – use it when we want to measure based on prev wave
Flat Correction
Will come in 3 moves
Can be a maximum of 5 moves Total 15 moves.
When (wave 3)any retracement does not go to 127% then it will go into flat correction