FAQ-10

What is the meaning of the Green Target Boxes and Red Target Boxes on your charts?

The Green Target Boxes are high probability reversal zones for corrective moves down. When you see a green target box that means the current count of waves (output of the Wave Analysis) considers that:

– the direction of the prevailing trend is up; and

– the current or expected decline is a temporary pullback; and

– price is expected to find support in that green target box; and

– after that pullback price may continue the move in the direction of the main trend.

The Red Target Boxes are high probability reversal zones for moves up.

The Harmonic Elliott Wave theory proposes that any trending move is subdivided into five waves ( please see the chart below ).

In addition, 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.

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