Base channel is made by three lines, primary, parallel and midline. To draw a base channel, you firstly connect the starting point of wave 1 with the end of wave 2 and put parallel line on the termination point of wave 1. If that wave 1 line is broken with a few closes outside of the channel, the base channel is confirmed. Normally this will confirm an impulsive price action as break beyond wave 1 line means that price is becoming extended and sharp which is characteristic of an extended wave 3. After a completion of an extended wave 3, the wave 4 can retrace and then stop at one of those three trendline, but in a lot of examples it will happen at the parallel/wave 1 line.

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