USDJPY Is this the end of wave 4?
The Elliott Wave Principle suggests a guideline of alternation between corrective waves, particularly between wave 2 and wave 4 of an impulsive wave sequence. This principle helps us identify the nature and behavior of these waves to better understand market structure.
These alternations may occur in many forms, for example: Nature of corrections (sharp or shallow), Depth of correction, Structure of correction (flat or triangle, combinations etc) and Time duration of correction (quick or longer corrections). The alternation helps us anticipate the likely form of wave 4 based on wave 2’s behavior to enhance forecasting accuracy.
So from these theory of alternation together with the rules around the wave principle, Looking at USDJPY at this level of price we have reached the deepest level of correction wave 4 can go. If the formation is correct, then wave 4 should not go beyond the red line. It made sense to me to take a short at the 50% fib retracement to tighten the SL however it is advisable to wait for confirmations, so saying I do believe there is still a plenty of chance for entry.
These alternations may occur in many forms, for example: Nature of corrections (sharp or shallow), Depth of correction, Structure of correction (flat or triangle, combinations etc) and Time duration of correction (quick or longer corrections). The alternation helps us anticipate the likely form of wave 4 based on wave 2’s behavior to enhance forecasting accuracy.
So from these theory of alternation together with the rules around the wave principle, Looking at USDJPY at this level of price we have reached the deepest level of correction wave 4 can go. If the formation is correct, then wave 4 should not go beyond the red line. It made sense to me to take a short at the 50% fib retracement to tighten the SL however it is advisable to wait for confirmations, so saying I do believe there is still a plenty of chance for entry.
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