[waveslider]

It really only works in a consolidation phase of the market. I believe point one is supposed to be the first pivot in the range, then point 2 is an attempt at a new high/low, which would fail (confirming range), then point 3 is a low below point 1 which also fails....

Basically it is a pattern whipsawing a lot of people, the more the better.

When there is momentum in a market, like there is here, the range is broken and price inverts into a larger wave rather than staying in a range.