BTC - Be cautious of the 5th wave. Elliott Wave Psychology
Updated
Elliott Waves are derived from human psychology of Greed/Fear. Take care when U trade/long 5th waves, most retail traders tend to FOMO here because they missed the initial waves
Note that 5th wave in turn has 5 subwaves, DONT long the 5th subwave of the 5th wave
Reference:- https://www.profitf.com/wp-content/uploads/2014/07/Elliott-Waves-Psychology.jpg
Here is an example of possible waves for BTC with the recent uptrend. Where was your entry? Where do you plan to exit? Here are my thoughts
Entries
1) The best, most profitable long entry is at the beginning of wave 1, but its very hard to catch the bottom
2) Wave 2 is good for entries as you can set a stop loss at beginning of wave 1 (In EW, wave 2 can't go below wave 1)
3) Beginning of wave 3 is also a safe area to long, especially when price crosses wave1 top. This is least profitable entry, but safer and easier
Exits
1) Wave 3 top is a safe exit, especially if you entered in wave or wave 2
2) Subwave 3 of the 5th wave is a profitable place for exit but little risky
3) 5th top is the most profitable exit, but also the hardest and riskiest. IMO not worth the extra profit as its always hard to catch the tops
4) 4th waves are usually triangles and tend to be hard to trade
There is always corrective waves (usually ABC) after 5 wave are done, if you weren't able to exit during the 5-wave uptrend, it is ok to exit during the beginning of the A or during the deadcat bounce of B wave
Note that B waves are perfect bull traps, easy way to recognize them is that they have only 3 subwaves instead of 5 subwaves
Hope this helps! Please leave a thumbs up and love to hear your comments
Note that 5th wave in turn has 5 subwaves, DONT long the 5th subwave of the 5th wave
Reference:- https://www.profitf.com/wp-content/uploads/2014/07/Elliott-Waves-Psychology.jpg
Here is an example of possible waves for BTC with the recent uptrend. Where was your entry? Where do you plan to exit? Here are my thoughts
Entries
1) The best, most profitable long entry is at the beginning of wave 1, but its very hard to catch the bottom
2) Wave 2 is good for entries as you can set a stop loss at beginning of wave 1 (In EW, wave 2 can't go below wave 1)
3) Beginning of wave 3 is also a safe area to long, especially when price crosses wave1 top. This is least profitable entry, but safer and easier
Exits
1) Wave 3 top is a safe exit, especially if you entered in wave or wave 2
2) Subwave 3 of the 5th wave is a profitable place for exit but little risky
3) 5th top is the most profitable exit, but also the hardest and riskiest. IMO not worth the extra profit as its always hard to catch the tops
4) 4th waves are usually triangles and tend to be hard to trade
There is always corrective waves (usually ABC) after 5 wave are done, if you weren't able to exit during the 5-wave uptrend, it is ok to exit during the beginning of the A or during the deadcat bounce of B wave
Note that B waves are perfect bull traps, easy way to recognize them is that they have only 3 subwaves instead of 5 subwaves
Hope this helps! Please leave a thumbs up and love to hear your comments
Note
uh oh! 5th wave maybe done already and in ABC nowTrade closed: target reached
Target hit precisely , there can another legup (5th sub-wave of 5th wave) But I wouldn't long here
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