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Wave Analysis

The Timeless Abyss of Trading: The Greatest Trap Of All-timeI am here with a unique topic. It is about a psychological trading trap called the cycle of doom. What got me interested in this psychological topic? Well, there are very few articles about it. You can count them on one hand, and more than 90% of traders are losing money. Most traders find their method of trading. What stops them from becoming profitable traders? Tradingview platform is one of the biggest charting platforms that provide an educational section and editorial peak for traders to sharpen their knowledge related to technical analysis, trading methodology, trading psychology, etc. As a trader, we are making market memories by improving screen time, practicing technical analysis, analyzing option data(if applicable), and a lot more. Why do we still fall short in applying in real time? What stops us from becoming a profitable trader? Something looks missing out! I would like to draw your attention to the psychological trap cycle of doom, a topic discussed by only a few traders. Let me be clear, I do believe that this topic is universally applicable! The cycle of doom is made up of three phases: The search The Action The Blame "Sun Tzu said Know the enemy and know yourself in a hundred battles you will never be in peril." In order to exit from the loop of the cycle, we have to understand the parts of the cycle. 1) The Search: Probably, it's the first phase of the cycle. Just recall your initial stages of trading. You were finding a trading strategy to make money out of the money. You may have asked to friend, watched a YouTube video, read an article on Tradingview, bought a book or course or indicators, or purchased the strategy. At that time, you were entered into the cycle. Additionally, we should never trade for enjoyment but treat it as a business. The statement does not apply to the initial stages. Trader explores new methods, theories, and systems. Postulate, Trader A uses X theory to do their day trading for a living, and you were impressed and took it to put your money on it, or you found the method by yourself. The trader will switch his next position after finding a system that is convenient for his trading and trusts that he can take minimal risks to achieve expected returns. 2) The Action: The Action phase is the second phase of the cycle. Now, you have a trading system that will make your money grow to expected returns. This phase can be super exciting for traders as they believe he has an edge and is most likely a key to opening a present of unrealistic returns. Issues arise when a trader employs their strategy without supporting evidence, like backtesting results. Your heart may be pounding, and your fingers may be trembling like a child, but it doesn't mean you should directly trade the strategy without checking the results, failure, and performance of the system. Just five percent of traders actually test a trading system before putting it into action. You might discover that the trading system performs well for a prolonged period. Suddenly, a drawdown appeared! At a certain point, everything may seem bleak. While profits might flow in initially, eventually, the losing trades start to accumulate. It's a red signal for traders that their trading system is now on oxygen. I don't think traders can trust the system after a big streak of losing traders. You have entered into the blame phase. 3) The Blame: The Blame is the final stage of the cycle. As we discussed, the trader has lost their trust in his trading system, which was a holy grail for him at the initial stage. The Red portfolio hurts more than a break-up. The trader is not happy with the system as it has wiped out the gain + trading capital, and the trading system is the only cause that affected the profit and wants to remove the system and search for a new strategy. 4) Loop of the cycle: As can be seen, the trader again finds a new strategy and makes an effort and action on it, then blames the system. The cycle repeats and traps the trader in this way. How to get out of the cycle? 1. Modification is the only way to survival & Trust the system: Traders should modify their strategy according to market conditions, instruments, and trading style. Maybe not everything works for everyone. Therefore, traders should do this according to him. For example, I use Elliott wave theory as the first base and price action as a confirmation tool along with different indicators according to the situation. I do modify Elliott and price action as per my observation of price moves and wavelength. 2. Backtesting is the holy grail: Choosing trading theory also depends on traders' mindset, risk-aptitude, and expected return. Scalpers will never check the PE, P/S, or EV/EBITDA ratio of the firm just because of their duration and risk-reward calculation. After choosing an appropriate trading strategy, traders should backtest their trading strategy before doing real-market transaction. We have the advantage of backtesting tools, algo, and virtual account, which was not available for pit traders. 3. Risk management: Already many ideas are available on this topic. The trading system should be giving proper returns as per the taken risk unless it is nothing more than Drilling a well in the desert. I need more time to write a full idea on the escape of the cycle of doom. Thank you! @Money_Dictators
BITSTAMP:BTCUSDEducation
by Money_Dictators
14
SP500 Entanglement of Price ActionFibonacci interconnectedness of impulsive and corrective waves. Impulsive. Since Time is taken into account in terms of angles, the Fibonacci channels derived from multi fractals simulate phenomenon of the order in chaotic price action. More like projection of Levels of Probability like in QM, where Interference Pattern derived from waves of probability in Double Slit Experiment. Nevertheless, I would never accept that price unfolds because of the very act of measurement that assumably collapses the wave function and makes it behave accordingly. I'm implying that price formation just like fabric of reality itself is not deterministic but probabilistic. In charts, the fabric of PriceTime is continuously curved by the price action itself. That's why even after dramatic rise of volatility the price would end up at certain random levels but distinctive to domestic chaos and frequency of reversals.
AMEX:SPYEducation
by fract
1
Mastering Impulses and CorrectionsHello, Successful trading in the stock market requires a comprehensive understanding of market trends and the ability to identify price patterns. One such pattern is the interplay between impulses and corrections. By recognizing these alternating phases, traders can gain valuable insights into potential market movements and make more informed trading choices. In this article, we will explore how to identify impulses and corrections in stocks and leverage this knowledge to guide our trading decisions. Understanding Impulses and Corrections Impulses and corrections are two primary components of price movements in the stock market. They represent the cyclical nature of stock prices, characterized by alternating phases of strong trending moves (impulses) and temporary price retracements (corrections). These patterns are largely influenced by the collective behavior of market participants, as supply and demand dynamics drive price action. Impulses: The Power of Momentum Impulses are the strong, directional moves that propel stock prices in a particular trend. They typically occur in the direction of the prevailing market sentiment and are characterized by higher volume and strong momentum. Impulses can result from a variety of factors, including positive news, strong earnings reports, or broader market trends. To identify impulses, traders should look for the following characteristics: Strong Price Movement: Impulses are marked by significant and sustained price advances or declines. These moves often occur in a relatively short period, indicating a surge of buying or selling pressure. Volume Expansion : Increasing trading volume during an impulse signifies market participation and validates the strength of the move. Higher volume confirms the presence of eager buyers or sellers, further reinforcing the direction of the trend. Break of Key Resistance or Support Levels : Impulses often break through important technical levels, such as support or resistance, further establishing the strength of the trend. These breakouts serve as confirmation points for traders. Corrections: The Breath Before Resuming the Trend Corrections, also known as retracements or pullbacks, are temporary price reversals that occur within an ongoing trend. They serve as a natural pause or breathing space for the market before resuming the dominant price direction. Corrections are characterized by price pullbacks against the prevailing trend, often retracing a certain percentage of the previous impulse. To identify corrections, traders should consider the following factors: Counter-Trend Price Movement : Corrections exhibit price movement in the opposite direction of the prevailing trend. These retracements can be shallow, typically ranging from 25% to 50% of the previous impulse's range. Decreased Volume : Corrections usually occur on lower trading volume compared to impulses. This decline in volume suggests a temporary reduction in market participation and reinforces the notion of a temporary price reversal. Support and Resistance Levels : Corrections often find support or encounter resistance at previously established price levels. These levels can act as potential reversal points, creating opportunities for traders to enter or add to positions. Using Impulses and Corrections in Trading : Recognizing impulses and corrections can provide valuable guidance for trading decisions. Here are some ways to leverage this knowledge: Trend Identification: By observing a sequence of impulses and corrections, traders can identify the prevailing trend. Understanding the broader market direction can help align trades with the momentum and improve the odds of success. Entry and Exit Points: Impulses provide opportunities for traders to enter positions in the direction of the trend. Once an impulse is identified, traders can look for suitable entry points during corrections, aiming to enter at favorable prices before the next impulse begins. Risk Management: Understanding the interplay between impulses and corrections can help traders set appropriate stop-loss levels. Placing stops below significant support levels during corrections can protect against adverse price movements while still allowing the trade to capture potential gains. Conclusion: Recognizing and understanding the patterns of impulses and corrections in stock prices is a valuable skill for traders. By identifying these phases, traders can gain insights into market trends, determine entry and exit points, manage risk, and develop effective trading strategies. Incorporating this knowledge into trading decisions can significantly enhance the chances of success in the dynamic world of the stock market. The above chart clearly shows you the Impulses and corrections on the Sunpharma chart. Good luck and all the best in your trading!
NSE:SUNPHARMAEducation
by thesharkke
Part 1: Equity Derivatives - A Beginner's GuideWhat are derivatives? Basic interpretation : something which is based on another source. A derivative is a contract or product whose value derives from the value of the base asset. The base asset is called the underlying asset. i.e., Sugar prices will rise if sugarcane prices increase due to low production. It means sugarcane is the underlying asset of sugar because the value of sugar is associated with sugarcane. There is a broad range of underlying assets: Metals: lead, gold, silver, copper, zinc, nickel, tin, etc. Energy: coal, natural gas, etc. Agri commodities: corn, cotton, pulses, wheat, sugar, etc. Financial assets: Stocks, bonds, forex, etc. There are two types of derivatives: 1. Exchange-traded: A standardized derivative contract, listed and traded on an organized exchange. 2. Over-the-counter/off-exchange trading/pink sheet trading: A derivative product in which counterparties buy or sell a contract or product at a negotiated price without exchange Instruments of derivatives market: There are four instruments in the derivatives market: 1. Forward: Forward is a non-standard agreement or agreement between two parties that allows you to buy/sell the asset at the agreed price for a pre-decided date of the contract. Forwards are negotiated between two pirates, so the terms and conditions of the contract are customized. These are called over-the-counter(OTC). 2. Future: Future contracts are similar to forwarding contracts, but the deal is made through an organized and regulated exchange rather than negotiated between two counterparties. A futures contract is an exchange-traded forward contract. 3. Options: A derivative contract that gives the right but not the obligation, to buy or sell an underlying asset at a stated strike price on or before a specified date. Buyers of options- Pays the premium and buys the right Sellers of options - Receives the premium with the obligation to buy/sell underlying assets. 4. Swap: A swap is a derivative contract between two counterparties to exchange for the cash flows or liabilities from two different financial instruments. It is an introduction article. I will cover all these topics in detail. Swap helps participants manage risk associated with volatility risk interest rate, currency exchange rates, & commodity prices. Index: Index = Portfolio of securities An Index shows how investors experience the economy. Is it progressing or not? A Stock market index gathers data from a variety of companies of industries. The data forms an overall picture and helps investors compare market performance through past and current prices. Financial indices represent the price movement of bonds, shares, Treasury Bills, etc. Importance of Index: 1. An index is an indication of a specific sector or gross market. 2. It helps investors to pick the right stock 3. An index is a statistical indicator. It represents an overall change or part of a change in the economy. 4. In OTC & exchange-traded markets, It used as an underlying asset for derivatives trading 5. An index helps to measure for evaluation of portfolio performance. 6. Portfolio managers use indices as investment benchmarks. 7. Index illustrates investor sentiments. Types of index: There are four classifications for indices: Equal Weighted Index: Each company is given the same weightage in the composition of this index. Equal-weighted indexes are more diversified than market capitalization-weighted indexes. This index focuses on value investing. Free-float index: In finance, equity divides into different among various stakeholders like promoters, institutions, corporates, individuals, etc. A tradable stake for trading is called a free-float share. i.g, If XYZ company has issued 5 lakh shares with the face value of Rs 10, but of these, 2 lakh shares are owned by the promoter, then the free-float market capitalization is Rs 30 lakh. Free-float market capitalization: Free-floating shares * Price of shares Index: BSE SENSEX Market capitalization-weighted index: In this index, each stock is given weightage according to its market capitalization. High market cap = High weightage Low market cap = low weightage Market Cap= Current market price * total number of outstanding shares i. e, if XYZ company has 1,000,000 outstanding shares and a market price of 55 rs per share will have a market capitalization of 55,000,000. Index: Nifty 50 Price Weighted Index: High price = More weightage Low price = Low weightage Popular price-weighted index: Dow Jones industrial average & Nikkei 225 I will upload the second part soon. Show your love with likes and comments. Thank you :) Money_Dictators
Education
by Money_Dictators
4
Trade Setup with Elliot WavesThis is an example of how you can use Elliot Waves to enter a trade. The bigger wave is wave (1) which consists of 5 waves. Now, for wave (2), a WXY pattern happened in a parallel channel. It can also be called a double three pattern. Wave (2) reached 50% of wave (1). 50% - 60% is typically where corrections end. After that, we can see a sharp rise up. This is wave 1 of wave (3). We can be confirm that it is wave 1 by seeing that it broke the channel of the WXY patterns. We can use this to enter a trade at and wait for wave 3 so that we can exit.
Education
by SamaaraDas
World Wars & US Inflation From 1914This is the US Inflation Rate (YoY) from 1914 until 2022. Symbol is called USIRYY and it measures the Inflation Volatility in the United States. With the War going on in Ukraine, and Russia trying to force its way through, I took the liberty of looking into the following: - How Global Wars Affect Inflation - How US Inflation Reacts to External Wars - How Wars Affect the Financial Markets You can see the time-lines, it's all laid-out in the chart (graph). I took all the Major World Wars and events that significantly affected, not only the US Inflation, but Inflation itself. First of all, the US Inflation Rate (USIRYY) tells me the following: * When the US was involved in a War, we can notice that the US Inflation spiked. * Most of the times when US was not involved in an External War, then Inflation dropped. That's because of War & Uncertainty Sentiment around this "terrific" word. War does not bring anything good, in fact, in only brings bad times. People die and global sentiment gets super-negative. This of course, leads to... you guessed it: Market Crash. Why? Because after or during times of War, there are Recessions and Depressions. Supply Chains are disrupted and the Global Economy falls on its face. What about looking at things from a Technical Analysis perspective? * Symmetrical Triangle: and the only way is UP! I will give you points which I believe are worth keeping in mind for the next Market Crash. First of all, let's be logical about this. Winter is coming and it's only gonna get worse before it gets better. As Inflation spiked to a 40y high, the higher powers intervened, in an attempt to cool the Inflation spike off. I'm talking here about the Federal Reserve (FED) ramping up the Interest Rates. This is the Effective Federal Funds Rate (FEDFUNDS). Can you see the break-out? They want to calm down Inflation, but they can't. Why? Because this is no ordinary Inflationary period, it's a long-lasting thing. One of those hyperinflation, deflation, stagflation, or whatever the heck these experts call it... :) The Volatility Index (VIX) tells me that another spike in Fear Sentiment is inevitable. I'm in love with Elliott Wave Analysis, so I labeled this next chart. This is the United States Consumer Confidence Index (USCCI) and it measures exactly what its name says, LOL. When it drops, people are freaking out. When it rises, people are optimistic and the Markets are going up. Daaaa! With all that said, what's the bottom line here? I believe that periods of terror are gonna hit us all. Are we having World War 3? Who the heck knows? All I know is that there are more pieces to this puzzle: United States 10Y Bonds (USB10YUSD) have reached the Support, and a spike bigger than the Covid Pandemic has started: The 10Y Treasury Note Yield (TNX) have broken out of a 40y down-trend: Isn't it ironic how it synced with the Inflation 40y high? Damn! Germany 40 (DAX, GER30, GRXEUR) is doomed. Fractal sequence, Descending Channel, and a "beautiful" ABC Elliott Wave Pattern. So, how can you prosper from all this? Metals could be a good hedge. Gold (XAUUSD) just broke out of an important Bearish Structure. Maybe it will go up. Natural Gas (NG1!) & Crude Oil (USOIL) however, are showing Bearish Reversals. Bitcoin (BTCUSD) is Bearish until further notice as well. But this may become the new currency moving forward. In times of terror, the banking systems might need to change. Cash and Card is so '00. WHAT'S YOUR TAKE? WAR OR PEACE? Leave your commend down below. Cheers! Richard
ECONOMICS:USIRYYEducation
by EW4X
5
SMC Trading Basics. Change of Character - CHoCH In the today's post, we will discuss one of the most crucial concepts in SMC - Change of Character. Change of Character relates to market trend analysis. In order to understand its meaning properly, first, we will discuss how Smart Money traders execute trend analysis. 🔘 Smart Money Traders apply price action for the identification of the direction of the market. They believe that the trend is bullish , if the price forms at least 2 bullish impulse with 2 consequent higher highs and a higher low between them. The market trend is considered to be bearish , if the market forms at least 2 bearish impulses with 2 consequent lower lows and a lower high between them. Here is how the trend analysis looks in practice. One perceives the price action as the set of impulse and retracement legs. According to the rules described above, USDCAD is trading in a bullish trend because the pair set 2 higher lows and 2 higher highs. 🔘Of course, trends do not last forever. A skill of the identification of the market reversal is a key to substantial profits in trading. Change of Character will help you quite accurately identify a bullish and bearish trend violation. 📉In a bearish trend , the main focus is the level of the last lower high. While the market is trading below or on that, the trend remains bearish . However, its bullish violation is a very important bullish signal, it is called a Change of Character, and it signifies a c onfirmed violation of a bearish trend. In a bearish trend , CHoCH is a very powerful bullish pattern. Take a look, how accurate CHoCH indicated the trend reversal on Gold. After a massive selloff, a bullish breakout of the level of the last lower high confirmed the initiation of a strong bullish wave. 📈In a bullish trend , the main point of interest is the level of the last higher low . While the price is trading above that or on that, the trend remains bullish . A bearish violation of the last higher low level signifies the violation of a current bullish trend. It is called a Change of Character, and it is a very accurate bearish pattern. Take a look at the example on Dollar Index below. In a bullish trend, bearish violation of the last higher low level quite accurately predicted a coming bearish reversal. Change of Character is one of the simplest, yet accurate SMC patterns that you should know. First, learn to properly execute the price action analysis and identify HH, HL, LL, LH and then CHoCH will be your main tool for the identification of the trend reversal. ❤️Please, support my work with like, thank you!❤️
OANDA:XAUUSDEducation
by VasilyTrader
7
SPX Trading The Pivots 30" charts & why use ETFsYesterday at the close we hit S4 and so without any stress or agonizing over it (can we go higher, is this the right level) I loaded up on SPXS, which I use because it is cheap so I can make a decent profit with sheer number of shares. During the night and this morning I checked the market and Alerts were going off we had reached S5, so again, no stress just trade the plan* So I took profits on the SPXS and since we were reversing to go up I bought TQQQ, again due to a cheap price so I can buy lots of shares. Why not use the Futures? I have daytraded hundreds of thousands of times and when I daytrade Futures i watched the 1" and 3" and tick charts and overtraded, giving my Broker so much profit from the volume, and from having been a Trainer I know for a fact even Computer and Security Engineers can only maintain focus for so long (20 minutes of teaching and they are thinking about a snack or reading email). I don't care how great you think your focus nobody can stay focused watching 1" or tick or range charts for 7 hours. Brokerages came up with "pattern daytrading" rules for a reason, to make more profit for them and make it harder for us to profit. I flipped the script on them, by trading ETFS I am forced not to overtrade. If you have been paying attention I have made about 8 or 10 trades in the last few weeks in the SP 500 room, all of them but 1 were winners (it was late in the day and they had been creating chap all day running up and down 6-10 points, sharply reversing, all day long and yes I wasn't focused to "took a small loss that a day later would have been a winner. This is nother reason you don't have to stress at all with this style of low stress high profit trading, because we see time and time again they revisit previous levels.... When I am in the room letting ya'll know what is happening realtime it is advice for daytraders there is not much to say about my trading style... I can set an alert at R4 and go back to bed now. I point this out because some people seem to be confused by my complex charts, I pay more to get a lot of information across 10 templates, which contributes as to why my calls are almost always correct, but I have started removing indicators so ya'll can see easier with less confusion... When i am talking in the room it is to share my gift of an ability to correctly tell you exactly what is happening, it annoys some that i am so often right, a form of jealousy, not my problem. I am only there to teach, which I love, and to help... my trading style doesn't require me to sit in front of charts all day I do it for fun and to help. *1 buy at S4 or S5, sell at R4 or R5 (based on the chart and recent activity, rarely do we reach the 5 levels.
CME_MINI:ES1!Education
by dryanhawley
How To Analyze Any Chart 📚 Gold Example 📹Hello TradingView Family / Fellow Traders. This is Richard, also known as theSignalyst. Today we are going to go over a practical example on #GOLD , but you can apply the same logic / strategy on any instrument. Feel free to ask questions or request any instrument for the next episode. 📚 Always remember to follow your trading plan when it comes to entry, risk management, and trade management. Good luck! Remember, all strategies are good if managed properly! ~Rich
OANDA:XAUUSDEducation
by TheSignalyst
37
Basics of Elliott Wave TheoryWelcome to the world of Elliott Waves. If you appreciate our charts, give us a quick 💜💜 Elliott Wave Theory revolves around three key elements: Impulse waves (in the direction of the trend) Corrective waves (against the trend) Wave degrees Impulse waves consist of five sub-waves, while corrective waves comprise three. These waves form cycles, representing market psychology in action. Key Rules of Elliott Waves Wave 2 cannot retrace beyond the starting point of wave 1. Wave 3 must be longer than both wave 1 and wave 5. Wave 4 cannot exceed the end point of wave 1. Elliott Waves and Fibonacci Retracement Incorporating Fibonacci retracement levels refines Elliott Wave analysis. The fourth wave often hovers between 23.6%, 38.2% and 50%, while correction waves C often unfold within the 50% to 61.8% range. Elliott Waves as Guides, Not Guarantees It’s crucial to view tools like Elliott Wave Theory as guiding lights, not crystal balls. While they don’t assure foolproof predictions, they offer a framework to decipher market cycles. As patterns repeat, understanding market psychology becomes the trader’s edge.
Education
by Vestinda
2
Learn What is TRAILING STOP LOSS | Risk Management Basics In the today's article, we will discuss a trailing stop loss. I will explain to you its concept in simple words and share real market examples. 🛑 Trailing stop loss is a risk management tool that allows to protect unrealized profits of an active trading position as long as the price moves in the desired direction. Traditionally, traders trade with fixed stop loss and take profit. Following such an approach, one knows exactly the level where the trade will be closed in a profit and the level where it will be closed in a loss. Take a look at a long trade on USDCAD above. The trade has fixed TP Level - 1.354 and fixed SL Level - 1.341. Once one of these levels is reached, the trade will be closed. Even though the majority of the traders stick to fixed sl and tp, there is one important disadvantage of such an approach – substantial gains could be easily missed. After the market reached TP in USDCAD trade, the price temporarily dropped, then a strong bullish rally initiated and the price went way above the Take Profit level. Potential gains with that long position could be much bigger. Trailing stop solves that issue. With a trailing stop loss, the trader usually opens the trade with Stop Loss and WITHOUT Take Profit. Take a look at a long trade on USDCHF. Trader expects growth, he opens a long position and sets stop loss – 0.8924, while take profit level is not determined. As the market starts growing, one decides not to close the trade in profit, but modify stop loss – trail it to the level above the entry. As the market keeps rallying, one TRAILS a stop loss in the direction of the market, protecting the unrealized gains. When the market finally starts falling, the price hits stop loss and a trader closes the trade in a substantial profit. The main obstacle with the application of a trailing stop is to keep it at a distance from current price levels that is not too narrow nor too wide. With a wide stop loss distance, substantial unrealized gains might be washed out with the market reversal. Imagine you predicted a nice bullish rally on Bitcoin. The market bounced nicely after you opened a long position . Trailing stop loss too far from current price levels, all the gains could be easily wiped out. While with a narrow trailing stop distance, one can be stop hunted before the move in the desired direction continues. A trader opens a long trade on EURJPY and the price bounces perfectly as predicted. One immediately trails the stop loss. However, the distance between current prices was too narrow and the position was closed after a pullback. And then market went much higher In conclusion, I want to note that fixed SL & TP approach is not bad, it is different and for some trading strategies it will be more appropriate. However, because of its limitations, occasionally big moves will be missed. Try trailing stop by your own, combine it with your strategy and I hope that you will make a lot of money with that! ❤️Please, support my work with like, thank you!❤️
OANDA:XAUUSDEducation
by VasilyTrader
9
GUIDE TO TRADING ELLIOTT WAVE TRIANGLEELLIOTT WAVE TRIANGLE Elliott Wave Theory is a popular method used by traders to analyze and predict financial market cycles, particularly in stock markets, forex markets, and cryptocurrencies. One of the key patterns within this theory is the Elliott Wave Triangle, which is a continuation pattern that occurs during the consolidation phase of a trend. Triangles are useful because they provide a clear structure that helps traders anticipate future price movements. Rules for Identifying Elliott Wave Triangles: 1. Wave Structure: Triangles always occur in wave four or B positions. Triangles consist of five waves labeled as a, b, c, d, and e. Each of these waves subdivides into three smaller waves labeled as 1, 2, 3, 4, and 5. 2. Wave Characteristics: Wave a, c, and e are corrective waves (usually zigzags or flats) and move against the prevailing trend. Wave b and d are corrective waves as well but move in the direction of the prevailing trend. Wave e often ends beyond the end of wave c, creating an overshoot. 3. Converging Trendlines: The trendlines connecting waves a and c and waves b and d should converge toward each other. 4. Time and Price Contraction: Triangles demonstrate a contraction in both price and time. Price range narrows, and the time taken for each wave decreases. 5. Volume: Volume usually contracts as the triangle pattern progresses, indicating reduced market interest. Examples From past Historical Data In the provided price chart of ELONUSDT, a distinct pattern spanning 116 days is evident. Following this period, there was a notable price movement where the market traded above the peak of wave (D). This breakout above the wave (D) high signifies the resumption of the trend. Likewise, when examining the price charts of MATICUSDT and TFUELUSDT, it is observable that the wave B position forms a triangular pattern. Upon breaking above the respective highs of wave D, prices surged dramatically, reaching new all-time highs. Finally, DFIUSDT serves as a prime illustration of a triangle formation within a bear market. Upon breaking below the low point of wave D in the triangle, a substantial decline in price occurred, leading to the establishment of new all-time lows. Some Potential Opportunity on the Horizon Below are some of the potential price charts am currently watching for potential future trading opportunities: Final Remark Remember, while Elliott Wave Theory and patterns like triangles can be powerful tools, they are not foolproof. It's essential to use them in conjunction with other technical analysis tools and risk management strategies to make informed trading decisions. Additionally, markets can be unpredictable, and patterns may not always play out as expected. Always practice due diligence and never risk more than you can afford to lose in trading. If you find the educational resource helpful please consider leaving a like, comment and most importantly don't forget to hit the follow button so you will be informed when we upload another awesome content. Trade safe and may the market be with you.
Education
by maonimisi