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5-0 Pattern

GBPCAD OUTLOOK: BULLISH SHARK TO BEARISH 5-0 CONTINUATIONMy daily outlook on GBPCAD is bearish, but I see one more bounce occurring before bearish PA continues. A bullish shark will potentially be completing at point 4 in a parallel channel. Traders who are short this pair, like myself, may think about taking profit in the PRZ and re-entering after this move is completed. Alternatively, this may be traded as a scalp to grab the pips off the bounce of the bottom parallel. Either way, I expect this setup to produce short term bullish movement before the bearish 5-0 pattern continues to target. Short-term long targets are placed at the .382 and .618 retracements of the shark CD leg. When I re-enter short, I will take profit at either the 1-4 WW target line or the 1.272 5-0 projection, whichever target is hit first. Overall Bearish Outlook: Bullish Confluence in the PRZ: 1. Bullish shark pattern completion 2. Parallel channel support 3. 1.786AB=BC 4. 1.618BC projection Thank you for viewing!
by glennmercer
USDJPY: Scenario #1: First Triangle Done? How About Another One?Last week, I posted this Scenario #1 (see Related Ideas: "QUICK ANALYSIS: USDJPY: Scenario #1: Contracting Triangle Wave 4") . That scenario worked out PERFECTLY. as prices hit the upper TL before the FOMC and then declined all the way down to the lower TL for a nice and quick profit. But after prices had dropped through that triangle, there was a stop and reverse V-reversal which left yet another LARGER triangle in place. And that i what I am now showing here. The recent low created is now the new D point of the triangle and prices are going to be working their way back up towards the top TL of the new triangle (which is the same TL of the former smaller triangle) in an E wave. Within this final wave E of the triangle, there is a POTENTIAL Bearish shark pattern developing which also has its 1.13 completion just slightly beyond the upper TL which indicates a possible E wave overthrow of prices. However, as with all valid shark patterns, the shark is followed by 5-0 pattern. In this case, a POTENTIAL bullish 5-0 pattern which could send prices back up. Something to be aware of. OVERVIEW OF TRIANGLE - 4Hr Chart MY TRADE PLAN Under this scenario, at this point I would do the same as in the Scenario #2 and wait for a retrace of this beginning leg in the uptrend back up into the upper TL. Only after I see that retrace will I consider to take a LONG position. However, if prices continue up, I will NOT take any LONG position until I see what happens at the upper TL and the completion of the shark pattern. At that point, I will be watching the price action to look for clues that prices may continue up following my Scenario #2 posting (see Related Ideas: " UPDATE #1: QUICK ANALYSIS: USDJPY: Scenario #2: ABC 5-3-5 ZigZag"). Then I will decide what to do. *DISCLAIMER: Please keep in mind that I am not giving any trading signals or trade calls here. Only providing my own trade thoughts for your benefit and insight as to my trading technique and style. Please don't ask if you should or should not take the trade or ask for stop loss and take profit levels. Any SL or TP given on my trades are my own I have used for my trade and are not recommendations for you to use. If you are not sure, then you do not have a trading plan for yourself in place. I suggest you make one before you continue to do any trading! If you like my posts and find them helpful, please take a second to hit that LIKE button and follow me so I will know my posts are useful to you. Doing so will encourage me to post more! As always, all constructive comments are welcome. Agree or disagree.
Long
by EverythingForex
2
TRADE: GBPUSD: SELL@1.55950 Shark + Wave C CompletionI haven't posted anything on this pair in awhile even though I have been actively trading it so I thought I'd post something on it. Here is a trade I just took from 1.55950 when prices broke through 1.56000 level in a bearish price action. The PA is confirming the fact that the corrective phase may be over and the wave (C) complete. From here, I can draw a POTENTIAL bullish shark pattern. I've also marked out an AB=CD pattern that would end within the PRZ of the shark pattern at the 2.0 extension. From this end point, if I locate the C point of the POTENTIAL 5-0 pattern there, then the D point of the 5-0 would end almost EXACTLY at a the B POINT line of a butterfly pattern on the DAILY chart which is also a MAJOR SR STRUCTURE level. Using this "breadcrumb"-type projection analysis technique when worked backwards serves to confirm the current reversal points as high-probability points. Of course, it probably makes TOO MUCH sense to be correct, right? ;-P We'll see..... Also, there is a POTENTIAL bullish butterfly pattern that would also complete near that 2.0 shark extension AND where the AB=CD pattern completes. TOO much confluence? Hmmmm....Here's the chart I posted 20 days ago that shows that butterfly pattern. Here it is now with the latest price action. Compare it to see how well my predictions from 20 days ago went. MY TRADE PLAN This is obviously a LONGER TERM trade. Probably will take 1-2 weeks to complete if it does. Along the way, there will be many retracements and reversals. But as long as the current top holds, none of that will matter in the end. So I am holding this SHORT trade for awhile. My stops will obviously go above the current highs where i have the wave (C) as being complete. *DISCLAIMER: Please keep in mind that I am not giving any trading signals or trade calls here. Only providing my own trade thoughts for your benefit and insight as to my trading technique and style. Please don't ask if you should or should not take the trade or ask for stop loss and take profit levels. Any SL or TP given on my trades are my own I have used for my trade and are not recommendations for you to use. If you are not sure, then you do not have a trading plan for yourself in place. I suggest you make one before you continue to do any trading! If you like my posts and find them helpful, please take a second to hit that LIKE button and follow me so I will know my posts are useful to you. Doing so will encourage me to post more! As always, all constructive comments are welcome. Agree or disagree.
Short
by EverythingForex
TRADE: AUDUSD: BUY@0.69170 LONG On Shark + CypherI'm already in LONG on this pair by way of my just posted analysis on this pair (see Related Idea: "ANALYSIS: AUDUSD: Is Wave 3 Done? If So, Where Will Wave 4 Go?") and also this POSSIBLE POTENTIAL bearish shark pattern's CD leg. I am putting my S/L at 0.69610 to give this trade some room and also to allow the C point of that cypher I posted in my analysis to establish should prices fall more. If or when the shark completes, then I would expect prices to retreat back down to complete the bullish 5-0 pattern before going back up to finish wave 4 and hit the Wolfe Wave targets. For those that don't know hat I am referring to, please see my ANALYSIS post. Also notice that the shark pattern would complete at/near the upper trend line of the ending diagonal which should cause a brief rejection before breaking through. This is typical pattern breaking price action. I would expect prices to target around the 72-74 cents level (yes, I know I said 72-73 cents in my analysis) to complete wave 4. Good luck! *DISCLAIMER: Please keep in mind that I am not giving any trading signals or trade calls here. Only providing my own trade thoughts for your benefit and insight as to my trading technique and style. Please don't ask if you should or should not take the trade or ask for stop loss and take profit levels. Any SL or TP given on my trades are my own I have used for my trade and are not recommendations for you to use. If you are not sure, then you do not have a trading plan for yourself in place. I suggest you make one before you continue to do any trading! If you like my posts and find them helpful, please take a second to hit that LIKE button and follow me so I will know my posts are useful to you. Doing so will encourage me to post more! As always, all constructive comments are welcome. Agree or disagree.
Long
by EverythingForex
16
ANALYSIS: GBPUSD: Now Come The FALL! But It's NOT the BIG ONE!For anyone that has been following my posts, you know that I've been BULLISH on this pair for a long time. And in almost every post, I am showing a bullish scenario. So you are now probably saying, "What the heck?" Why are you now saying it's gonna FALL?". Well ,one of the characteristics of a successful trader is to NEVER be so tied into being "right" that you can't see the OBVIOUS right in front of you. It's NEVER about being "right". Only about making money.. You are either with the market or against it. And I got news for you, the market ALWAYS wins! I continuously analyze and re-analyze the market with an open mind. I try never to be so caught up about me being "right" that I fail to see the obvious. And right now, the scenario that I am posting here seems to be the obvious! Mind the fact that it's STILL only a possibility. I'm not saying this is for sure. Only time will tell. So enough with the lesson. So what the heck is going on with Cable right now? Let's see.... What you are seeing in the chart above is the COMPLETED bullish shark pattern I posted about last Friday (see Related Ideas: "TRADE: GBPUSD: BUY@1.5380 Completed Shark"). In fact, I am already LONG on this pair by way of that shark pattern. BUT...by this scenario, this is NOT the beginning of the long anticipated wave (C) up! By this scenario, this move up will only be a brief retrace of that last big move down in a wave (2) action. It should be a sharp retrace and ending right around where I have the POTENTIAL bearish 5-0 pattern completing. This move up will also be a retest of the recently broken lower trend line of the larger consolidation pattern. After which, I would anticipate a wave (3) down that will be quite strong! So in this scenario, THAT wave (3) is what I will be watching for! Although this downward move I'm showing is happening on the DAILY TF, I expect that this will all occur pretty quickly and will not take several weeks to complete. But this down move will be a bear trap. So when most people have jumped on board this bearish move, then the BIG wave (C) up will begin trapping all those bears! OVERVIEW - Daily Chart Showing the 3 Patterns, Wave Count And Projected Price Action This DAILY Chart is basically the same one from last week (see Related Ideas: "QUICK ANALYSIS: GBPUSD: Two Scenarios It Could Follow") in which I laid out a bearish scenario (Scenario #2). In this Daily Chart below, the 3 patterns that could define this move down are shown. The first stop would be the bullish butterfly pattern which could mark the end of the wave (iii) down. The other two pattern, the bat and the crab could make the end of the down move and wave (B) and mark the beginning of the BIG up move in wave (C). Notice that the bat and the crab BOTH finish almost on top of each other! Also notice that there is a AB=CD pattern along the way down that completed near a MAJOR SR Structure. Just something to take note of when prices reach that point and to expect some kind of reaction. But first, prices MUST cross down below the B point before any of this can happen. For now, that B point will provide support for a short wave (ii) up and then BAM! The wave (ii) down will shoot past that B point line and proceed down sharply. MY TRADE PLAN As per my trade post last week, I am currently LONG on this pair expecting the bounce retracement of that big move down last week which I labeled a wave (i). This wave (i) turned this pair bearish. I'll be in this wave (ii) up until it hits the 5-0 pattern. Upon that BEARISH 5-0 pattern completion, I will be looking to go SHORT for the wave (iii) down.
Long
by EverythingForex
10
Shark 113 extension with a potential 5-0 patternReading the chart After a failed push (B) of only 113% extension of O to X, price almost immediately reversed to the other direction, breaking the secondary bearish trendline. Now the 88.6% retracement of O to B could not bring any relief from the bullish pressure. Prediction The second level to watch for is the 113% extension of B to O, which could lead to a completion of a bearish Shark pattern at 0.7183. It is also possible that the primary trendline could deliver resistance. If this level holds, there is a good chance that the pair will make a reciprocal AB=CD and therefore a the 5-0 pattern is almost certain. Setup entry: 0.7183 minimum stoploss: 0.7216 target 1: 0.7094 (risk:reward 1:1.48) target 2: 0.7039 (risk:reward 1:2.4 (stop&reverse)
Short
by Mikoxl.
2
UPDATE: EURUSD Bearish Shark Trade TP1 & TP2 HIt (+264 pips)The bearish shark that completed a couple of days ago (see Related Ideas: "EURUSD: A Completed Shark Pattern + Explanation") has hit both TP1 and TP2 targets for a nice combined +264 pips. There is still a TP3 target available but personally, I do not think it will hit. Why? See my last post on this pair that shows a STRONG reversal area that is looming just above what would be the TP3 (61.8%) target (see Related Ideas section "UPDATE #1: EURUSD: Another Bullish Shark Is Waiting + Bull Bat"). Also, with the TP2 target hit, the Bullish 5-0 pattern is also complete so we may see prices go down a little bit more and then I will expect to see prices start moving back up maybe after some consolidation.
Long
by EverythingForex
7
REPOST: GBPUSD: Post-FOMC Analysis - Setting Stage Wave 3 UP! I'm not even sure I'm going to refer you to read my previous recent posts on this pair! Although in general they were correct, my predicted execution was not! When you have a cypher, and two Gartley's all pointing in the same direction among other factors, you'd think you'd have some confidence in the setup, right? But then they ALL get blown away! Tends to shake the confidence somewhat! Well, so goes the life of a market analyst. Nothing to do but get back on the horse. Ok. So post-FOMC, the general sit-rep hasn't changed. In fact, the FOMC has given even more confidence that I am on the right path. Right now, prices are FINALLY on their way down in a wave (ii) correction. In wave counting, predicting end of wave 1's and the beginning of wave 2's is very difficult because there isn't any prior wave in the same cycle to base anything on. But I think I may have it right this time (3rd try!). IF I am correct, then this wave (ii) will unfold in a ABC zigzag down to the .786 retrace of the prior impulse wave. At the .786 level, prices will be retesting the former H&S pattern which had sent prices on it's way up (and yes, that is a SMILEY face because I caught that wave (i) up and took some nice profits! If you also did, then you deserve that smiley face, too!) And this will also setup a "786" trade (some call it a "Noble Trade" so named after a guy named Vic Noble who's students named it after him. My method and execution differs from him somewhat.) Also, recent PA have setup a POTENTIAL bullish shark pattern (green0 that...tada!...also completes right at that .786 retrace. And no, .786 has nothing to do with the shark pattern. It's just confluence that it happens to also complete there in this case. BIGGER PICTURE (Near Term) Here's what I am expecting in the near-term bigger picture.What happens in wave (ii) is really of interest to me to set up my LONG buys for the coming wave (iii)..... SUMMARY & TRADE PLAN So now that I'm assuming prices are falling back down in a wave (ii), what I'm looking to do is to setup my LONG orders for that area where I am expecting wave (ii) to end and wave (iii) to begin. I'm already LONG from the previous H&S pattern that started prices up in the bigger wave C of the ABC corrective wave I've predicting to happen for almost a month now.. For the meantime, I have already placed SHORT orders to catch some pips on the way down for this wave (ii). *DISCLAIMER: Please keep in mind that I am not giving any trading signals here. Only providing my own trade thoughts for your benefit and insight as to my trading technique and style. Please don't ask if you should or should not take the trade. If you are not sure, then you do not have a trading plan for yourself in place. I suggest you make one before you continue to do any trading! If you like my posts and find them helpful, please take a second to hit that LIKE button and follow me so I will know my posts are useful to you. Doing so will encourage me to post more! As always, all comments are welcome.
Short
by EverythingForex
1
GBPUSD: Post-FOMC Analysis - Setting The Stage For A Wave 3 UP!EDIT: See the REPOST for the correct chart. I'm not even sure I'm going to refer you to read my previous recent posts on this pair! Although in general they were correct, my predicted execution was not! When you have a cypher, and two Gartley's all pointing in the same direction among other factors, you'd think you'd have some confidence in the setup, right? But then they ALL get blown away! Tends to shake the confidence somewhat! Well, so goes the life of a market analyst. Nothing to do but get back on the horse. Ok. So post-FOMC, the general sit-rep hasn't changed. In fact, the FOMC has given even more confidence that I am on the right path. Right now, prices are FINALLY on their way down in a wave (ii) correction. In wave counting, predicting end of wave 1's and the beginning of wave 2's is very difficult because there isn't any prior wave in the same cycle to base anything on. But I think I may have it right this time (3rd try!). IF I am correct, then this wave (ii) will unfold in a ABC zigzag down to the .786 retrace of the prior impulse wave. At the .786 level, prices will be retesting the former H&S pattern which had sent prices on it's way up (and yes, that is a SMILEY face because I caught that wave (i) up and took some nice profits! If you also did, then you deserve that smiley face, too!) And this will also setup a "786" trade (some call it a "Noble Trade" so named after a guy named Vic Noble who's students named it after him. My method and execution differs from him somewhat.) Also, recent PA have setup a POTENTIAL bullish shark pattern (green0 that...tada!...also completes right at that .786 retrace. And no, .786 has nothing to do with the shark pattern. It's just confluence that it happens to also complete there in this case. BIGGER PICTURE (Near Term) Here's what I am expecting in the near-term bigger picture.What happens in wave (ii) is really of interest to me to set up my LONG buys for the coming wave (iii)..... SUMMARY & TRADE PLAN So now that I'm assuming prices are falling back down in a wave (ii), what I'm looking to do is to setup my LONG orders for that area where I am expecting wave (ii) to end and wave (iii) to begin. I'm already LONG from the previous H&S pattern that started prices up in the bigger wave C of the ABC corrective wave I've predicting to happen for almost a month now.. For the meantime, I have already placed SHORT orders to catch some pips on the way down for this wave (ii). *DISCLAIMER: Please keep in mind that I am not giving any trading signals here. Only providing my own trade thoughts for your benefit and insight as to my trading technique and style. Please don't ask if you should or should not take the trade. If you are not sure, then you do not have a trading plan for yourself in place. I suggest you make one before you continue to do any trading! If you like my posts and find them helpful, please take a second to hit that LIKE button and follow me so I will know my posts are useful to you. Doing so will encourage me to post more! As always, all comments are welcome.
Short
by EverythingForex
3
UPDATE #1: EURUSD: Another Bullish Shark Is Waiting + Bull BatWhile everything has kind paused now waiting on the FOMC, let me post this update real quick.... In my previous post, I talked about a bullish shark that will complete around the same point as the bullish 5-0 pattern would complete: at the 1.09600 area. Recent price action has now also set up a POTENTIAL bullish bat that will also complete right around that area as well. Combined with a couple of other factors, this makes this area with heavy confluence for a reversal. You have: 1. a MAJOR SR Structural Zone with several previous touches 2. 50% Retracemernt of the previous up trend 3. THREE bullish harmonic patterns all completing in that same area Makes for a pretty clear highly probable reversal zone, don't you think? But we'll have to wait and see if prices will get there first. I also drew in a POTENTIAL Bullish Butterfly right that would complete right below the Bat BAMM Line. There is also a minor SR structure around that area. What I think might happen is that after prices drop past the BAMM line, it will find some support at that point where the butterfly completes and the minor SR structure, reverse back up to the BAMM line and then down from there. Maybe.... Now, all this could go out the window depending on the FOMC......
Short
by EverythingForex
1
UPDATE #1: EURUSD: A Completed Shark Pattern & ExplanationNow that prices are starting to descend towards the profit targets and the D point completion of the 5-0 pattern, I wanted to provide the profit targets. This time, I have provided 3 profit targets instead of the usual 2. Profit Targets: 1. 38.2% (111 pips) 2. 50% (152 pips) 3, 61.8% (186 pips) I provided 3 because each one of these levels also have a minor SR structure associated with them so some caution is advised when prices meet each of these levels. But as always, you must decide upon your own risk tolerance and trading plan. *DISCLAIMER: Please keep in mind that I am not giving any trading signals here. Only providing my own trade thoughts for your benefit and insight as to my trading technique and style. Please don't ask if you should or should not take the trade. If you are not sure, then you do not have a trading plan for yourself in place. I suggest you make one before you continue to do any trading! If you like my posts and find them helpful, please take a second to hit that LIKE button and follow me so I will know my posts are useful to you. Doing so will encourage me to post more! As always, all comments are welcome. Agree or disagree. Good luck!
Short
by EverythingForex
2
UPDATE: GBPUSD: Shark TP1 & TP2 Hit (+182 pips) + 5-0 CompletedThis bullish shark pattern has hit both it's profit targets. You might notice that the TP1 for a shark is at 50% and not the usual 38.2% retracemernt. This is because a shark is part of the 5-0 pattern and the D point of the 5-0 pattern sits at the 50% retracement level. However, you are free to take profits at the 38.2% level of a shark pattern if you wish. Trade according to your own plan and risk tolerance. If you are only playing the shark, time to take your profits. However, as in my previous analysis on this pair, I am expecting that this up move is just the start of the large wave C up trend to complete the ABC corrective wave. So I am personally holding onto my FULL Long positions per the wave C. Anyone who took this trade must do what your own plan tells you to do. As of this posting, prices had reached and exceeded the 50% mark which completes the 5-0 pattern. As I mentioned in my post on this, this 5-0 pattern is a bearish one. But depending on which way it goes from here, we can have a regular 5-0 pattern and prices will go down or we can have a "failed" 5-0 pattern in which prices will go up. Either way it goes, it should go for a while. Such is the nature of the 5-0 pattern. Right now, prices are lingering around the 50% level. This is what I said I needed to see in order for a "failed" 5-0 to occur. If prices remain around this area and just consolidate for a bit, it gives more confidence that prices may continue higher.
Long
by EverythingForex
1
EURUSD: A Completed Shark Pattern & ExplanationI wanted to post this completed shark pattern separately from all the other patterns that are present right now in this pair. Refer to my other post (see Related Ideas: "ANALYSIS: EURUSD Outlook: Pattern Explosion! What Happens Now?") . I did not include this Shark pattern in that post as I didn't notice it until recently and also it gives me another chance to show another example of it in action. As well as again show the 5-0 pattern. The Shark pattern is unique among all the other harmonic patterns in that it is both a "class 2" pattern where the "C" point (in the case of a Shark pattern, the "A" point is the "X" point) actually exceeds the A point AND it is also an extension pattern where the ending point is beyond the origination point of the pattern. In the case of the Shark, it is 1.13. So is this actually a COMPLETED shark pattern? Right now, as of this posting, prices have NOT actually reached the exact point of the 1.13 extension (1.11133). The highest high is at 1.11122 right now. But the shark CAN BE considered completed. Why? Because the MINIMUM required point for the shark's extreme harmonic impulse wave (the BC leg) is at .886 and prices have exceeded that already. Also notice that the RSI is right now oversold. In confluence with a harmonic pattern completion, this is a strong signal of a pending reaction. Now you might ask, "Where is the PRZ?". In THIS CASE, the PRZ doesn't exist! Why? Because Shark patterns demand an immediate reaction upon it's completion. In this shark, the extreme harmonic extension ratios (1.618 - 2.24) would fall way short of the C point completion so they would not be of any importance here. BTW, in shark's, there is not any ratio requirement for the mid-point (the A point in shark's). Now, the shark , being only a PART of the 5-0 pattern actually is opposite that of the 5-0 pattern in nature. Meaning that, like here, the shark is a BEARISH shark whereas the 5-0 pattern upon it's completion is a BULLISH 5-0 pattern. Upon completion of the 5-0, I would expect prices to resume an uptrend. WHAT I AM EXPECTING NOW Now that the shark pattern has been completed, I am watching the PA to see which direction will it go from here. As you know from my other related post, there is a bearish bat still looming overhead and I am not convinced prices will not go up more. If prices violate the shark's 1.13 C point, then I will consider the shark to be invalid and wait for the bat to complete to go short. Am I favoring this shark and 5-0 over the other patterns I had drawn up in my other post? NO! Again, I trade what I see. NOT what I want to see. If prices do begin to fall, I will expect that it will fall to the 50% retracement point to complete the 5-0. You might also notice that the 50% level also has confluence with a minor SR structure. At that point, I will reassess the PA to see where it might go next. There are other harmonic patterns below the 50% retrace of the 5-0 completion point so will need to wait and see what happens. Remember, overall I am BULLISH on this pair so really, I am looking for good opportunities to go LONG.
Short
by EverythingForex
3
GBPUSD: Explaining the "5-0" Pattern And What To Expect ShortlyI recently posted a bullish shark pattern on this pair and right now we are seeing prices start to head towards the TP1 of the shark which would be at 1.5572. Since I don't see many posts on the 5-0 pattern here, I'd thought I do some explaining about it for those not very familiar with it. What I wanted to explain here and caution about is that the shark pattern is part of the 5-0 pattern even though the shark itself is a BULLISH shark in this case. What we have here is a BEARISH 5-0 pattern. Which means that when the 5-0 pattern completes, prices SHOULD reverse and head back DOWN. And the D point of the 5-0 is expected at 1.5568 or just a few ticks below the TP1. Of course, prices can hit the TP1 and close below it to complete the D point of the 5-0 as well. So I am not saying TP1 WON'T be hit. Now, what also must be watched is what happens after prices have reached the 5-0 D point. Will it start to retrace back down? Or will it continue up? Two characteristics of the 5-0 pattern: 1. If it completes and prices reverse at the D point, it will be a true 5-0 pattern and prices should head back down strongly and probably for not just for a short time. It may signal a new bearish move down 2. IF prices hit the D point, maybe pause there for a bit and then resume moving upwards, this will become a "failed" 5-0 in which case prices will continue moving up and probably for a long while So keep an eye on the D point and watch the reaction. For those playing the shark pattern, I'd take at least 50% of the profits off the table and wait and see what prices do after that. If prices continue skyward, I'd look for BUY opportunities on short retracements because it should go for a while!
Long
by EverythingForex
2
DXY Bullish 5 - 0 patternNot often seen published at TV, I think this DXY 240m is a "text book" example of the harmonic 5 - 0 pattern rules from SC Harmonic Trader Basic 5-0 Requirements The pattern incorporates 5 points within the structure (X, A, B, C, D), the starting point of the structure (0) can be the beginning of any extended price move. However, the initial point X must possess a specific alignment with respect to the A and B point. The X, A , B formation of the structure is usually some type of impulse move. The XA projection that defines the B point can not exceed a 1.618. Any extension greater than a 1.618 will negate the structure, as smaller impulse moves are preferred. Again, this is the failed wave 3 or wave 5 – in Elliott Wave terms – that establishes the rest of the structure. The BC leg is the longest price length of the structure and must be at least a 1.618 extension of the AB length but it must not exceed 2.24. This tight range of 1.618-2.24 is a defining element of the structure.If the 1.618 minimum limit is not reached, the structure is not a valid 5-0. After the BC leg has reversed from that zone, the 50% retracement is measured from the B point to the C point. In addition, the Reciprocal AB=CD is projected from the C point (an equivalent length of the AB leg) to compliment the Potential Reversal Zone (PRZ).
INDEX:DXYLong
by pete002
This is How the 5-0 Pattern Looks Like #forexThis is not a forecast that the pattern will complete. This is just an illustration of the harmonic 5-0 pattern. (Price could go in any direction from current levels). The Pattern The first requirement for the pattern is a new low that exceeds the prior low( Point B and X) Point B should be within the range of 1.13 and 1.618. Shouldn't exceed 1.618 extension of wave XA A rally should followe now, creating wave BC, where it should reach at least near the 1.618 extension of wave AB, and can reach up to 2.24. A correction of wave BC should follow, the correction should complete wave CD at point D. Point D should be around 0.5 retracement of Wave BC. Thats the "Potential Reversal Zone" OR PRZ of the pattern This is not a place where you immediately Buy. Its a place to look for buy confirmation signals over the lower time intervals. As you can see, the pattern on chart is still a potential pattern, and far from complete. So that doesn't mean that we should look to short now looking for a move to point D. Good luck Exclusively Subscribers to my mailing list will get one month access to my trading account . subscribe here thefxchannel.com , My best regards Technician
Education
by Technician
33