Originally posted by C0UNDE
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Please refer to fig 1 of the book, the pic should similar to that pic.
Your first picture have trend extreme and pullback in the wrong direction (the last bull zigzag might be a good setup on H4)
If the MP is up then the trend is heading down (bearish) then the flip should against the trend/prime stage (bullish), later the move of stage 2 should go with the trend (bearish) then made a CUT (bullish). Until this point your pic correct..
But,,,,,
After the CUT, the move should continue as the trend (bearish) and move beyond the beginning of cut. this strong move should cause a trend extreme. Your picture not even beyond the beginning of cut, not even any extreme.
The label cut - trend ext in your pic could be a flip in lesser degree while your pull ext maybe a trend extreme.
Imagine that the whole move is like a zigzag, the initial end would be MP and the other end Trend Ext, the midlle line should be the flip. The second line to the trend ext being intercept by Cut.
Remember that Cut and Pullback didn't make a flip
You began to get the point
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