ZIGZAG Adjustment Wave

Adjustment Wave

This time, we will briefly explain the adjustment wave.

Characteristics of Wave 2

• It is composed of three waves. (The counting of these three waves is the internal movement within wave abc 2.)
• The basic push-and-pull target value is 50–61.8% of Wave 1.
  Drawing a Fibonacci retracement at this point makes it easy to understand, so it’s recommended. Please treat this as a guideline.Absolutely do not use this as a guaranteed stopping line!
• In some cases, most of Wave 1 may be retraced, butthe starting point of Wave 1 must never be crossed.
  This is absolute. If it breaks the low of Wave 1, you must recount since it’s a counting error.
• Waves 2 and 4 will never follow the same pattern.This is easier said than done; it’s something you practice to master.
  Simple price action ⇔ complex price action, alternation rule = alternation
• Wave 2 as a whole becomes a zigzag pattern, a flat pattern, or a triangle consolidation.
  Most of the time it tends to become a zigzag pattern.

Apart from zigzag patterns, Wave 4 or Wave B are often seen.

If you have a good intuition, you’ll think, “I see, that’s what it means …!”

You’ll understand, but in patterns other than zigzag, the trend still continues a bit more, so

as long as you ride the flow, you’re fine.

There are some terms up to here that might make you wonder, “What is this?”

Zigzag??Many of you might think, “Are you kidding?,” but it is the official name.

Easy to remember, right. (laughs)

It would be easier to relate if all names were like this...

If explained with a diagram, it would look like this

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Practical Points

1. It is not uncommon for a full 100% retrace of the wave.Full retracements happen quite often, so be careful.
2. Waves almost always take zigzag patterns.

“Speed adjustment” is the image of retracing all at once.

When you look at the chart, you might feel, “What?!” but stay calm and pick them up.

It can be nerve-wracking, but go all out!

Wave 2 becomes quite busy like this.

Next, I’d like to introduce the strategy for Wave 3, the profitable phase.