We commonly observe 121 pattern apprearing in two locations (there are other locations that will be described later).
A reversal 121 pattern apprears at critical trend reversal points, as a running correction. This type of pattern/trade, due to the precise nature of 121 pattern and impulse wave that follows the pattern (Elliott fractal wave 3 or C), offers incredibly good risk to reward ratio.
A 121 continuation pattern apprears inside the higher degree impulse wave. Some traders use it in a clever way to define the trend, and use it as an early indicator to spot the end of a trend.
For more info about 121 / One2One pattern and the confirmation methods see -> 121 - table of content
Last edited by Admin; 08-08-2012 at 01:42 PM. Reason: Reversal and Continuation 121 pattern - Updated