# FAQ-10-2

## How You Find Location for the Green Target Boxes and Red Target Boxes?

As I explained, I draw Green Target Boxes and Red Target Boxes on my charts to show where the current or expected price move may terminate. The Green Target Boxes are high probability reversal zones for moves down. The Red Target Boxes are high probability reversal zones for moves up.

The Harmonic Elliott Wave theory proposes that any trending move in price follows a specific pattern called Five Wave fractal. Therefore, when price played out the whole fractal you may expect that the trending move is about to terminate. Corrective counter trend moves follow a number of specific patterns and their termination can also be predicted based on the same principle.

Not only we may predict termination of the bigger price structures but also we may use that principle to predict termination of specific waves inside that fractal. For example, each wave A and C in direction of the trend should also be subdivided in five waves of a smaller size:

That chart above exemplifies a fractal nature of price moves. Any trending move in prices is just a combination of two interconnected fractals, Five Wave fractal and A-B-C fractal. That features of the fractals let you predict when a trending or corrective move may terminate. You can expect that price will keep moving along the Five Wave fractal until it has not completed the very final wave 5. Moreover, because you know that wave 5 has to have A-B-C internal structure you may pinpoint a termination point for the whole Five Wave structure when you zoom-in to its final wave C of 5. And because that C of 5 is by itself structured as Five Wave fractal on a smaller scale you can go to a micro level of 5 min chart to check when a large rally plays out enough waves to be considered completed. For example, you may follow a large Five Wave fractal on a Daily timeframe. That could e a rally lasted for several months. To predict when it is about to complete you count waves 1 up, 2 down, 3 up, 4 down and finally A of 5, B of 5. When you are about to start tracking the very last rally in wave C of 5 you may switch to hourly or 30 min chart to count smaller five waves i, ii, iii, iv and v that together comprise that final wave C of 5.

Not only Harmonic Elliott Wave theory provides you with a limited number of common patterns followed by price, but it also suggests a number of repeating ratios between waves inside those patterns. That lets you, first, to check whether you have correctly identified a fractal. Second, you can predict where the wave may terminate its progression based on those common ratios called *extensions *and *retracements*.

** The principle behind predictions is very straightforward, when price has played out the whole fractal you check if a wave has hit one of the common ratios to each other.** For example, one of the rules of the Five Wave fractal stipulates that wave 3 has to extend at least to 176.4% of the size of wave 1. Another example is wave 5 which tends to top at 76.4% or 85.4% of the distance covered by both, waves 1 and 3.

When you learn those patterns and ratios between waves in those patterns then prediction of a target of a price move becomes an easy task. **You simply count waves to align the actual price chart with the model fractal and check ratios between waves!**