Chapter 3 of Mr. Glenn Neely’s book

You often ask me about Chapter 3 of the book and why I didn’t include its contents on the YouTube channel.

Initially, when Mr. Neely wrote this chapter, it was very simple and understandable. However, after some time, he rewrote it, turning it into the most complicated and difficult chapter of the book.

Mr. Neely describes the rewriting of Chapter 3 as:

“Disgraceful rewriting”

In fact, the purpose of this chapter was to help novice analysts perform logical wave counts, but it ended up demotivating and frustrating beginners.

Why I skipped explaining Chapter 3:

At first, Mr. Neely believed that analysis should start from lower to higher time frames. But after 40 years of market activity and using the NEoWave method, he concluded that analysis should proceed from higher to lower time frames. This change invalidated a large part of Chapter 3.

In general, the techniques in Chapter 3 can be summarized as follows for initially identifying monowaves:

– If a monowave retraces between 38% and 61%, it most likely has an impulsive structure.

– If it retraces more than 61%, it is almost certainly corrective.

– If it retraces less than 33%, it is most likely corrective.

– If it retraces between 33% and 38%, it is in a border zone where both possibilities exist.

– If a monowave fully retraces and takes longer time, it is a corrective pattern.

– If it fully retraces in less time, it is the last wave of an impulsive pattern.

Finally, I recommend skipping Chapter 3 and returning to it only after fully understanding NEoWave logic—it’s not essential.

Good luck
NEoWave Chart