CND continues to correct
In Elliot wave, corrections are often in a channel with multiple overlapping waves. The rule states that these waves will eventually be completely retraced and that price will eventually go above the previous impulse wave. Assuming this is a second wave correction, second waves often retrace atleast 61.8% of the previous impulse wave( wave 1). This is the case with CND right now. Price is in a channel correction.
How do we trade these corrections?
It has pierced the 50% retracement level so we are looking at price to at least go to the 61.8% retracement. Aggressive entry would be to ladder (buy) into a position at the 50% 61.8 and 78.6% levels.
A conservative approach would be to wait for confirmation of a reversal. The first sign is a small impulse wave in the opposite direction of the correction. Another sign is a strong break of channel with good volume. Another possible sign is a head and shoulders formation.
Each of these signs could be used as a reason to closely watch a pair, or could be used to enter into a trade.
How do we trade these corrections?
It has pierced the 50% retracement level so we are looking at price to at least go to the 61.8% retracement. Aggressive entry would be to ladder (buy) into a position at the 50% 61.8 and 78.6% levels.
A conservative approach would be to wait for confirmation of a reversal. The first sign is a small impulse wave in the opposite direction of the correction. Another sign is a strong break of channel with good volume. Another possible sign is a head and shoulders formation.
Each of these signs could be used as a reason to closely watch a pair, or could be used to enter into a trade.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.