This pattern has a high reward-to-risk ratio because you can put a very tight stop loss.
The “perfect” must have the following aspects:
1.Move AB should be the .382 or . of move XA.
2.Move BC can be either .382 or . of move AB.
3.If the retracement of move BC is .382 of move AB, then CD should be 2.24 of move BC . Consquently, if move BC is .886 of move AB, then CD should be 3.618 extension of move BC .
4.CD should be of move XA.