VIP Members
January 24, 2014
Whenever price stops trending with consecutive lower low and lower highs, or higher highs and higher lows, I consider it a new battle where decisions are made once again. In the case of this image that lower high followed by higher low reset the flow which started again as a fresh decision to go south. This helps me understand the wave count of how many pushes in any given direction since the last decision point.
VIP Members
January 24, 2014
Hello Theo,
So you restart the wave count after the 'price reset' as in the attached image is that right?
Can price reset in any other ways, e.g., if price moves sideways for an extended period of time in a very narrow range?
Pepe.
Without you (price action), I am not worth a [s]cent.
The most important thing to keep in mind is which waves are relative to one another. After that reset the waves stretched out a little as the trend formed and direction was chosen. When you look back you can see that this reset was a small battle won with force by the bears and a very probable start point for the decided and unchallenged down trend flow. It's just information that you can use later on as the move progresses.
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