The Rule of Alternation

posted under by ceecabolos
In its more general application, this rule or principle holds that the market usually doesn't act the same way two times in a row. If a certain type of top or bottom occurred the last time around, it will probably not do so again this time. The rule of alternation doesn't tell us exactly what will happen, but tells us what proba­bly won't. In its more specific application, it is most generally used to tell us what type of corrective pattern to expect. Corrective patterns tend to alternate. In other words, if corrective
wave 2 was a simple a-b-c pattern, wave 4 will probably be a com­plex pattern, such as a triangle. Conversely, if wave 2 is complex, wave 4 will probably be simple. Figure 13.22 gives some examples.

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