XRPLong
XRPUSD in leading diagonal
Updated
It seems XRPUSD is presently nearing the end of a leading contracting diagonal. There are a few rules to be observed with these, and the price action of the last couple of weeks abides by them so far.
In a leading diagonal, waves 2 and 4 have to zig-zags (I've drawn those in); it's clear in the chart that they are. Wave 1 was also a zig-zag, albeit a very large one. Wave 3 appears to be more of an impulse wave, though as a guideline that is normal (1, 3 and 5 appear to be impulses even though they are zig-zags). No wave retraces beyond the end of the preceding waves, which satisfies another criterium of a diagonal. Also, in a leading diagonal, the fifth wave has to move beyond the end of wave 3, so we should be breaking the 27th March top soon.
In a contracting diagonal, wave 5 has to be shorter than 3, 3 has to be shorter than 1, and 4 has to be shorter than 2; all good so far.
Wave 5 in a diagonal often ends at or slightly beyond (throwover) a line drawn from the ends of waves 1 and 3, projecting a price in the 0,20 range. It seems that the present fifth wave may be a zig-zag, with a triangle for wave B, and if we extend the A-part of that same wave, we'd also hit that same target. That target would also still satisfy the criterium of wave 5 being shorter than wave 4.
So, on the short term we should see an impulse wave moving up to the 0,20 area, after which we can expect a sharp down move; but let's deal with that when we get there.
Let's see what happens.
Disclaimer: This isn't trading advice, don't trade with what you can't afford to lose, etc. You know the drill.
In a leading diagonal, waves 2 and 4 have to zig-zags (I've drawn those in); it's clear in the chart that they are. Wave 1 was also a zig-zag, albeit a very large one. Wave 3 appears to be more of an impulse wave, though as a guideline that is normal (1, 3 and 5 appear to be impulses even though they are zig-zags). No wave retraces beyond the end of the preceding waves, which satisfies another criterium of a diagonal. Also, in a leading diagonal, the fifth wave has to move beyond the end of wave 3, so we should be breaking the 27th March top soon.
In a contracting diagonal, wave 5 has to be shorter than 3, 3 has to be shorter than 1, and 4 has to be shorter than 2; all good so far.
Wave 5 in a diagonal often ends at or slightly beyond (throwover) a line drawn from the ends of waves 1 and 3, projecting a price in the 0,20 range. It seems that the present fifth wave may be a zig-zag, with a triangle for wave B, and if we extend the A-part of that same wave, we'd also hit that same target. That target would also still satisfy the criterium of wave 5 being shorter than wave 4.
So, on the short term we should see an impulse wave moving up to the 0,20 area, after which we can expect a sharp down move; but let's deal with that when we get there.
Let's see what happens.
Disclaimer: This isn't trading advice, don't trade with what you can't afford to lose, etc. You know the drill.
Trade active
So, this is an excellent moment for me (not you, only me, this is not trading advice) to open a long position. As long as we don't go any lower than this, we're still within the rules of a triangle serving as a B in this ABC up.If not, the stop-loss is about as tight as it could get..
Note
A second after I wrote that, we broke back up through the trendline, so things are looking good. Now, we wait!Trade closed: target reached
Profit taken at 0.20, and on to new trades.With such an extended last movement in a leading diagonal, I'll be looking for a good place to enter a short position after I have confirmation this move has truly ended.
Disclaimer
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