The starts with a market price that establishes the X and A points. Once this leg is determined, the pattern evolves.
Point B retraces to 0.382 – 0.618 Fibonacci level of the leg XA
Point C is formed when prices extend the XA leg by at least 1.272 or within 1.130 – 1.414 level
Point D is formed when it retraces 0.782 Fibonacci level of XC
Point D is also where prices are expected to reverse
Targets are determined as 0.382 and 0.618 levels of the CD leg
Stops losses are placed a few pips below or above the high or low of point X