page 162 In an imperfect world, it does not make sense to use one retracement to anticipate the end of a secondary price movement. Instead chartists can define a reversal zone. A move into this zone increases the chances that the secondary move is nearing an end. The natural starting point for the zone is 50 percent because it is between the two Fibonacci numbers 38 and 61% and the two Dow Theory numbers 33 and 66 %. In fact 50 percent represents the sweet spot because it is the ideal retracement for a trend, taking two steps forward and one step back wards. . These Zones are not fail proof. They mainly alert the chartists to pay closer attention to price action. . Once the trade begins with a break out , and the trend is still in place. A new high can be expected.
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