We would clearly see that the market goes up and forms the 1-2-3 pattern as shown. However if we are to measure point 3 in the context of a retracement from point 1 to point 2 (the blue vertical line in the chart below), we would see that point 3 in the pattern is not usually more than 61.8% retracement from 1, and not less than 50% retracement from point 1. The chart below demonstrates this very clearly.