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14 CHAPTER SIX Subdividing Retracement Waves And Labeling Them In the previous chapters we have concentrated on the trend and the intervening retracement waves. You may have noticed that a retracement wave has many waves within it. These waves are called subwaves. Subwaves are always a part of, and within, the even-numbered retracement waves, and are identified using the alphabet (see Illustration 6-1). As with retracement waves, the bigger waves are labeled with the higher hierarchical letters, Level One being the highest. Level One: (A), (B), (C), (D), (E), (F), (G). Level Two: A, 8, C, D, E, F, G. Level Three: a, b, c, d, e, f, g. Note: Because there are more waves with the trend, it is necessary to have four levels of hierarchy. Retracement subwaves are fewer, requiring or>!y three levels of hierarchy.
 Illustration 6-1 A retracemeni wave can i>e made up of three, five, or more subwaves. In Illustration 6-2, retracement wave 2 is made up of three subwaves (a, b, c), and the symmetrical retracement wave 4 has five subwaves (a, b, c, d, e). Note that even though retracement wave 4 has five subwaves, it is symmetrical in size with retracement wave 2. A subwa ve can subdivide into smal ler waves or become part of a subsequent bigger subwave. In Illustration 6-3, the subwave has subdivided into five waves (a, b, c, d, e), and in Illustration 6-4, a small a, b, retracement becomes part of the A wave of a greater A, B, subwave retracement. The proper labeling of the subwaves that go to make a retracement wave during an uptrend is illustrated by a daily Deutsche Mark chart (Illustration 6-5). A downtrend is illustrated by a daily sugar chart (Illustration 6 6).  Illustration 6-3   Illustration 6-4 Illustration 6-2
 u. - ?1  Subdividingaiotracementwaveandlabelingit with the alphalxH is an important trading tool, but for proper counting of symmetry retracement waves it is not neiess.irv. lor example, Illustration 6-7A shows the proper numeric labeling and the alphabetical labels for the subwaves. Because our main interest is in seeing that the magnitude of rrracement wave 4 matches retracement wave 2, it becomes unnecessary to label the subwaves with the alphabet (see Illustration 6-7B),  Illustration 6-7A  Illustration 6-7B it is sufficient to wait for wave 4 to be similar in size to wave 2. Not having to label the subwaves that are part of a retracement wave simplifies wave counting and trading even more. However, s.ince every trader wil I be using the Symmetry Wave Method.differently, it is important to further illustrate proper labeling of subwaves. The illustrations that follow here show proper sub-labeling of retracement waves.
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