What happens after a W formation? My preferred trade setup is to identify a W forming within a demand zone and take an aggressive entry off the second peak before the right side of the W has formed. If the W fails to break resistance, it's ok because I can close the trade there and wait for a new setup.
But what happens when you miss the entry? In order for a W to be considered to have played out, it needs to break above the resistance level where the left side started. Once it does that, the next step is a successful retest. This retest doesn't have to stay above the previous resistance but it does need to create a HL as this now creates new bullish market structure. This can also often set up an Elliot Wave with the right side W being wave one - and this is why I love W's! Imagine catching all 5 waves of an EW from wave one.... huge trade.
So if you miss the aggressive entry, the next opportunity is on the retest after the W has completed.
Looking at this chart we can see ETH is yet to confirm a new uptrend as 1. it hasn't broken a W resistance and 2. It hasn't come back to create the HL.
But what happens when you miss the entry? In order for a W to be considered to have played out, it needs to break above the resistance level where the left side started. Once it does that, the next step is a successful retest. This retest doesn't have to stay above the previous resistance but it does need to create a HL as this now creates new bullish market structure. This can also often set up an Elliot Wave with the right side W being wave one - and this is why I love W's! Imagine catching all 5 waves of an EW from wave one.... huge trade.
So if you miss the aggressive entry, the next opportunity is on the retest after the W has completed.
Looking at this chart we can see ETH is yet to confirm a new uptrend as 1. it hasn't broken a W resistance and 2. It hasn't come back to create the HL.