We can now draw our Fibonacci retracement lines from the low to the high of the main swing. This first retracement is the most important as it will identify what potential pattern or patterns we are looking at. Also, we can begin the process of elimination. Depending on this correction other patterns will be discarded.
So now our focal point become between the 38% and the 78% correction of the main swing. Price has to close somewhere in this zone and form a low. This low cannot be taken out by a lower close or all patterns become invalid and the process starts all over. Keep in mind that if this occurs, take a look at the previous swing because you could have missed something. Price has to stay within the confines of this zone! This correction will become point B or C of any pattern. Sorry the chart should say B or C in the green cube.
So now our focal point become between the 38% and the 78% correction of the main swing. Price has to close somewhere in this zone and form a low. This low cannot be taken out by a lower close or all patterns become invalid and the process starts all over. Keep in mind that if this occurs, take a look at the previous swing because you could have missed something. Price has to stay within the confines of this zone! This correction will become point B or C of any pattern. Sorry the chart should say B or C in the green cube.
If you fail to plan, you plan to fail.