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Exactly.......but there will not always be Divergence.
I do use a Larger Timeframe to accompany that smaller charts Signal that you described to Verify the Trend change.
In other words the Larger Chart is Turning/Swinging, and that smaller Chart gives that Sell=LH or Buy=HL to Enter.
You can also use the Fib Retrace Levels to help with the Entry for the #3 point Confirmation.
In post #55 the Chart Indicates where there was some Support, as well as a Measured Distance Calculated from the Head to Neckline then from Breakout of Neckline to Projected area which was very close to the Support lines that were drawn.
post#56 chart was basically the same, but Bullish move.......the Reverse Signal you ask about is Basically a Retrace back to the Neckline somewhat of a Support or Resistance Signal.
Not sure if i got that across very well but that set up has Good Probability of Success.
Thanks,i understood.I also checked the term Measured distance,i heard that before,but kind of forgot.Basically,one want to look for such perfect patterns as per your charts.The more perfect it looks,the more it has chance for success.At least from my practise.
Have an indicator that does that.Although, as you say,it could be tricky,because it has various of settings,yet,it could spot a percfect pattern.Not quite often though.
Well...couple things i can say is when i Spot Divergence i am Automatically looking for the #3 point to Confirm for Either an ABC Correction, or Beginning of Trend change with Successive HH or LL to follow depending the Direction.
Also if that Divergence has any Significance, or Actually is a Turning Point then we usually get 2 Legs at least in that New Direction....for example B to C or #3 to #4 point are both examples of that Second Leg....so we can at least have a Good chance of making money on that Second Entry/leg.......Good Probability for that set up.
More charts later of the 1-2-3...ABC Correction.
I was referring to the 3rd wave of the Elliott wave or C of the Correction.
Either one would be the Second wave in that New direction......so i was saying you could have a Good Probability of that Second leg Occurring if that Divergence Signal was good for more than one leg/Swing in a Trend....
coz i have seen the Divergence Signal fail to follow through, and just get a one leg Retrace.
it is just part of the Labeling of the Structure of the Higher High's, and Lower Lows's....but somewhat Complex.
Many Traders just look for the HH or LL to confirm and Enter on that Leg until it fails to Continue that Sequence.
