Trends and Counter Trend

Five-Wave Impulse Trend: 
Made in the direction of the higher time frame trend direction. 
1. 5 Distinct Sections
2. Higher highs and higher lows (bull trend) or lower highs and lower lows (bear trend).
3. Section Highs and Lows do not overlap


Simple three-wave or three Section ABC Counter Trend (correction)
1. If Section Highs and Lows overlap, it should not be an impulse trend and 
should be a counter-trend. 
2. The most typical counter-trend is three sections which make up a simple ABC 
correction. 


Complex Counter Trend
1. More Than 3 Distinct Sections
2. Multiple Sections Overlap
3. It is very difficult to project the completion of a complex counter trend.
4. The most important thing is to recognize it is a counter-trend and not an impulse trend. 


Important of Identifying the Position of a Market Within A Trend or CounterTrend.
1. Helps determine which side of the market to trade. If a trend or counter trend is 
not complete, you trade the side that the trend or counter trend is moving.

2. Helps identify if the patterns signal that a trend is complete. If the pattern is in 
a position to be complete, it will be an early warning of a reversal and you will
trade the other side of the market.