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Wave Analysis

How to define the end of a correction based on time - EWHi EW Fans, made you a CheatSheet how to define the end of a correction based on time. If you are sure about the start of a wave/impulse you can very easy define a possible time "vector" for the end of the correction. Start of the impulse = Zero Top of the impulse = 0.382 End of the correction at the common Fib numbers: 0.681/0.65; 0.89; 1; 1.272; 1.618 and so on. If you combine it with a Fibonacci Retracement Tool (LogScale) you are able to define a price and time "vector" for a possible reversal or for the next impulse/wave. Greetings
BITSTAMP:BTCUSDEducation
by UnknownUnicorn39812589
2
What are the mistakes that traders make?What are the mistakes that traders make? 1. Keeping capital in a place other than a wallet is prohibited! Never store your capital in a place other than your wallet. Sometimes some people keep their capital in an exchange wallet for a long or short period of time. This is very wrong. If your desired exchange where your capital is stored falls into the hands of hackers or profiteers, all your capital will definitely be lost. With this account, we conclude that only when you are going to buy and sell, enter your capital into the exchange and then withdraw your capital again if you want to stop doing this for a while. This is better for you because you can better manage your capital. 2. Greed is forbidden! There are many people who are greedy in global markets, especially digital currencies. People who are active in this area should not be too greedy because if this happens, it may destroy them. Our suggestion to you is that you should not buy with your emotions and let them make perfect purchases at the right time. 3. Excessive risk is prohibited! Risk in financial markets should be equal to greed. If you take too much risk in the digital currency market, you may face many failures. If this problem happens, your capital will definitely be lost. You may have heard that Bitcoin, for example, will have its best price in the next few days. Therefore, after hearing this news, greed comes to you, and this event makes you buy emotionally. 4. Repeating a mistake is prohibited! Before you enter the trading market, you should know that every trade is a lesson for you. In every transaction, you get many lessons that you should remember. No human being will make the same mistake again, and definitely, if this happens to you, you should know that one day you will lose your capital.
BITSTAMP:BTCUSDEducation
by MonoCoinSignal
28
Smart Money Concepts versus Long Money ConceptsFor the past 2 years I'd say I endowed myself in the study of a few technical approaches, and I have to say the most flawed is using smart money concept annotations to build a trade bias, as each annotation from a BOS, to order block can be subjective on every time frame. I feel the overlying goal for any trader is to first align themself with the trend. As you see on this chart, I have a refined, untapped order block on this 15 minute chart succeeding a bleed off in the previous session followed by what most traders perceive as a dead range but it isn't. I've come to notice in these ranges, price tends to scatter interest using a series of corrections on lower timeframes. Flats, Running Flats, and Diagonals are scattering price movements, but nowadays they call them complex pullbacks. Shaking my head. It's complex because the language you are trying to codify the price movements with does not align with the environment. Now order blocks in line with the trend are high probability, but is usually succeeding a correction. I think ever since liquidity became a focal point of most traders as now it is a buzzword, most traders only look for nuances such as CHOCH, which is simply an ABC, with order flow being extending and clear intentions made in the C leg. I mean it sounds cool, but its all buzzwords, and have no relation to the true nature of pricing. Price does not just move, reverse, or stop. It fluctuates in what may seem as unpredictive nature but in all reality its all mathematical and involves keeping a study of price action and the models you build using the same predictive format. Of course with the addition of granularity into the lower timeframes, trying to trade order blocks may seem incomprehensible, because at most times it is. Understanding Price cannot be done with SMC alone, and I feel most traders who do employ the idea of SMC are looking for marketability factors for their trading and more or less uses ICT concepts to overlay their own trading understanding, ICT even said himself that Order blocks are just visual representations. Visual representations of price activity at specific point in time. But what did the order block accomplish? Why are you positioned within the order block itself? This is why I don't trade SMC and removed it from my trading understanding and rather I u It doesn't build enough context. Now lets add context to this bearish order block at (C)5 on the 15M. We can make assumption that the strong order flow in the sell to buy includes the 3rd wave extension as price made a sub minor correction in the 47 percent area of the sub impulse (C)5, which is the (A) wave. At the print of the A wave, the bullish sub impulse was so weak, it didn't shift any order flow on the 4H chart, but in contrast, the correction back into order flow gave print to wider range bear candles in comparison to the previous bullish order flow. Although corrective, price made clear objective to extend price downward over time with a definable 3rd wave extension and impulse back into the untapped supply to demand flip which is another SMC concept. This if course brought in many traders of this concept, and with it trade stops just below the order block which was eventually ran as you can see. Now for everything else. Ill just update the idea if requested. Im tired of typing at this point. Thank you though and feel free to comment.
OANDA:XAUUSDEducation
by NQQuan
2
Why is trading so emotional? In August last year, I published an educational post around Fibonacci. There's also thousands of articles and books available on the topic. But how does it fit with being emotional? Often people talk about Algos, smart money concepts and a load of other terms. All trying to make sense of the market, Fibonacci isn't magical or mystical. It's a set of simple numbers that work - due to humans wanting to see patterns in everything they look at. Here's the article from last year - feel free to click it and go through that one as well. The issue I have when educating people - is there is always a desire to find an automated solution. I keep saying, if algos are that good - we wouldn't have school, doctors or firemen; they would all be sipping cocktails on a beach far away! If you want to learn technical analysis, you really need to dig deep into the emotional analysis. People like Dow, Elliott and Wyckoff (for me, are not technical gurus) they merely understood - human psychology made waves, changed sentiment - the bigger players in the markets know this. It's why most news outlets and websites around TA push writers who only talk MA's and RSI's. It keeps fresh sheep on track. The market is all about liquidity - these levels are created at psychological levels & from there, it's copy, paste, repeat. Take a look at this on the current Bitcoin move down from the All Time High. Swing 1 = 618 of A-B Swing 2 = 100% of the A-B Swing 3 = 100% of the A-B Swing 4 = 618 of the A-B Swing 5 = 1.23 range and 1.27 range of the A-B Then even when you step down a level you can see the move inside the moves looking similar. Local support is 618... When I started posting on @TradingView publicly - I explained why we where seeing value areas and re-accumulation for the first times. These levels were starting to show signs of the crypto space being institutionalised. This is important to understand, as much like Fibonacci levels, the price would now act in a different way to psychological levels. In stepped Wyckoff and you could see from before and after - where and why the price would go. Before Here's the AFTER shot. Lucky Guess? Well - maybe on the way back from the 28k levels highlighted in March, the very same fibs became obvious. If we where seeing Elliott waves form you could therefor measure the fib extensions. This was August the 24th - read the comments as to why the drop was coming (4 move) and why we would likely see the drop just above the old all time high. By October we had seen the forecasted extension levels getting hit - a retest followed this and we dropped. So, like I said - there's nothing magical, it's all about sentiment and psychology. Learn this and you will progress as a trader. Disclaimer This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
COINBASE:BTCUSDEducation
by Mayfair_Ventures
31
Jumping S-curvesIn this post, I will explain what jumping S-curves means and how you can identify potential S-curves before they jump . First, let's begin with the chart above (also copied below). This is a yearly chart of McKesson Corporation (MCK), a medical supplies company. As you can see in the chart below, this stock has been soaring over the past year despite most other stocks being significantly lower. Here is the performance of the S&P 500 over the same time period. Whenever I see something highly unusual in a chart, such as extreme outperformance, I check the higher timeframes to see what's driving price on a technical level. Below is the yearly chart for MCK. When I examine price action over a long time period, I always log adjust my chart. Below is the log-adjusted chart. Upon seeing this chart I immediately knew what was going on: the stock price jumped S-curves. I will try to illustrate below how I reached this conclusion. To begin, I drew Fibonacci levels from the last reaction low to the last reaction high on the yearly timeframe. The previous reaction low was the bottom of 2008 because that bottom was a Fibonacci retracement of some earlier reaction high, the reaction high is the top in 2015 because price did not surpass that high without first undergoing a Fibonacci retracement (to the golden ratio). As you can see above, from 2015 to 2018 the price retraced down to the golden ratio (0.618) on the yearly chart. It is often from this retracement level that the base of the second S-curve is created. (For simplicity, I only included the 0.618 Fibonacci level on the chart). Some may say that this pattern is merely a bull flag or pennant. (See chart below) Indeed, bull flags and pennants can be another way to visualize S-curve jumps. Whereas, on a deeper, more mathematical level, S-curve jumps are logarithmic spirals (approximated as Fibonacci spirals or Golden spirals). If you wish to delve deeper into logarithmic spirals, including the Golden spiral, you can check out this Wikipedia page: en.wikipedia.org These Fibonacci or Golden spirals are present on mostly every chart and they appear on mostly every timeframe (hence they are fractal ). One of the best charts you can use to visualize these spirals is the chart of Bitcoin. Below are charts of Bitcoin which attempt to show the endless fractal nature of Fibonacci spirals (or "S-curve jumps"). I've only illustrated a few of the spirals, but indeed there are numerous spirals. (I tried to do my best using the tools on Trading View to draw these spirals, but it can be quite hard to manipulate the curves perfectly to price action.) One may ask what about when price falls? That is obviously not an S-curve jump since the price is falling. Actually, when price is crashing it is usually just an S-curve jump, or Fibonacci spiral, on the inverted chart. Although I have not tested it with scientific rigor, I do hypothesize that Bitcoin's price movement is a series of infinitely fractal and competing Fibonacci spirals on various timeframes, including Fibonacci spirals on inverted scales. Price movement can be thought of as an infinite series of S-curve dilemmas where infinitely fractal S-curves, including those of which are inverse S-curves, compete to govern the next price move. Each dilemma is resolved when an S-curve reaches its inflection point, such that it governs price movement and price moves rapidly in that direction until it approaches capacity and faces its next dilemma. Those who know Calculus may recognize this chart. Indeed this is the graph of a logistic function. The mathematical terminology for an "S-curve" is sigmoid function . Here are some more interesting charts of S-curves (none of which is intended to be investment advice) Meridian Bioscience (VIVO) jumps S-curves on its yearly chart The U.S. Dollar Index jumps S-curves on its yearly chart The entire price action of Chinese EV Company (NIO) is an S-curve that just completed a perfect golden ratio retracement Japan's faces a population S-curve dilemma Citigroup underwent S-curve growth up until the Great Recession. Then it crashed or underwent S-curve growth on the inverted chart. In summary, price movement involves an endless series of S-curves or Fibonacci spirals. Identifying an S-curve on a high time frame before it reaches its inflection point and breaks out can lead to tremendous gains (among the most lucrative gains one can realistically make in the financial markets).
NYSE:MCKEducation
by SpyMasterTrades
22
ROOT CAUSES OF LOSSES IN TRADINGHello, Over time we have spoken about how we can make money in the trading space. Today we take time and look at the various reasons why people lose money in trading. The main reasons why people loose money in the investing/trading space are ; Fear and Greed. This is clearly also shown in Warren Buffett's quote, buy when others are fearful, and sell when others are greedy. It sounds easy but lets take time and understand this two terms. (Both emotions that can make you lose money as well as lose the opportunity). FEAR: The English dictionary defines fear as an unpleasant emotion caused by the threat of danger, pain, or harm. In trading fear is caused by the lack of being ready. This in most cases will lead to traders loosing on oncoming opportunities as well as getting out of trades very early. The Remedy to fear is to make sure you practice a lot and have trading rules that you follow before you make any trades. GREED: According to the Dictionary greed is an intense and selfish desire for something, especially wealth, power, or food. In trading greed is mainly brought about by overconfidence & the thinking that this is the last & greatest opportunity to make the maximum amount of money. Greed can at times be seen when traders hold their trades for long periods of time way past their set targets. The Remedy for greed would be to keep to a strict discipline in your trading journey. More practice will help you overcome the above two emotions that can lead to great losses. Developing a strategy that works for you is very key also in your learning journey. Over my journey I have developed the below rules that i follow before taking any trade 1: I draw structure to make sure the markets are making sense from a trading perspective 2: I then identify the patterns that are forming in the setup 3: I then look at the indicators to make sure they are confirming my trade 4: Identify the future wave (trade I am going to make) 5: Identify the future reversal point (That's my trade target) 6: Have a logical risk to reward ratio (has to be over 1:3 in all cases) 7: Stop loss behind the previous impulse Good luck & all the best in your trading journey. "Practice is what you do that makes you good."
Education
by thesharkke
1
Why Learn Candlestick Patterns? Explained!👨‍🏫 1. Candlestick Chart Patterns Signal Earlier Because its patterns constitute one candle or multiple, it signals much faster than classical technical analysis such as Moving Average (MA) and chart patterns such as triangles. Early signals inform us to close our open positions or initiate a new one, and both cases are beneficial. 2. Low risk In candlestick charting techniques, the bottom of the top of the pattern acts as a support or resistance line. Compared to other charting techniques, such as classical chart patterns, the risk is much lower because you have to wait until the price breaks the support or resistance line.But, in candlestick patterns, you do not have to wait. Thus, using a candlestick chart, you can profit more by closing earlier and entering earlier. 3. Reading Candlestick Chart Is Easy Every candle or combination of candles has something to say.For example, a doji means indecision. If it appears at the end of an extended trend, it implies that the current trend has lost strength. And market participants are in an indecision moment. Thus, a counterattack is enough to change the direction. 4. Candlestick Chart Patterns Are Reliable Candlestick chart patterns are reliable if used properly. I mean that traders should look at broader pictures to make a decision on what a candlestick pattern says.For example, supporting signals should confirm a pattern. And if there is no confirmation, it is better to avoid trading. 5. Learning Candlestick Charting Is Easy Learning candlestick chart techniques is easy due to the body and shadows of candles. Any size of tails and candles transfers a meaning. For example, a long body without shadows indicates that drivers are potent, and 4-price doji means that bulls and bears are equal in power. 6. Candles Can Help Other Techniques You can use candles with every other tool and technique. It is complementary to technical indicators and confirms their signals. 7. Studying Charts Become Easier Learning history is easy with candlesticks. For example, if you want to study the GDP impacts on a specific financial asset, you can find all of them and conclude. 8. Candlestick Charting Is the Best Option For Day traders Day traders open and close their position on the same day. So, they need technical analysis that triggers signals quicker to initiate a new one or close their current position.Candlestick patterns signals faster than any other. The disadvantage of Candlestick Chart Patterns Everything has good and bad sides. Candlestick chart is no exception. Probably the biggest disadvantage of candlestick chart patterns is that they do not define take-profit level. However, you offset it by using other tools such as Fibonacci retracement. As mentioned earlier, you can combine candles with other techniques to validate your analysis. Final Words Candlestick chart analysis is a great method for the examination of financial assets.The best way to use it is to combine it with other tools and experiences.
Education
by TopTradingSignals
8
WHAT'S THE NEXT LEVEL WE WILL SEE ON LKR ( LANKAN RUPEES )?Check out the trade plan for USDLKR today based on the technical analysis. Hope this analysis is useful, make sure to hit the thumbs and also follow my tradingview profile for future updates. Thank you! We have seen an 83% of boost in the USD/LKR Pair since March 2022. Here I have attached the chart and update for reference👇🏻 Sri Lanka pegged in both directions in March amid ‘float’ ECONOMYNEXT – Sri Lanka’s central bank bought 196 million US dollars in March from commercial banks and sold 207 million dollars in a pegged exchange rate, despite an attempt made to shift to a floating regime, official data shows. The weekly timeframe is holding a distribution zone on the top after the massive breakthrough in March. Price is under control inside the distribution zone. We are required to confirm the direction with a clean breakout confirmation on price action. Check the chart below 👇🏻 By any chance, if the price confirms a bullish breakout on the distribution, then we have a greater chance of seeing these targeted price levels on the USD/LKR pair. There is no specific timeframe to achieve these targets and we have to wait for confirmation. Check the chart below 👇🏻 On a bearish breakout, we will see a correction close to 50% on the bullish trend formed. Check the chart below 👇🏻
Education
by traderchamp_
Elliott Wave DegreesRalph Nelson Elliott acknowledged 9 degrees of waves from the Grand Super Cycle degree which is found in weekly and monthly time frame to the Sub-minute degree which is found in the hourly time frame. He labelled them as below mentioned. 1 Grand Super Cycle 2 Super Cycle 3 Cycle 4 Primary 5 Intermediate 6 Minor 7 Minute 8 Minuette 9 Sub-Minuette It is a good understanding to start applying a wave count to a market from higher degree to all the way lower degree which you want to trade. you need to first learn about the labeling of wave degrees. Elliott Wave is a very helpful to understand the charts of any assets. the waves from the main degree are subdivided into intermediate waves which also subdivided into minor waves and the minor waves are also subdivided into minutes waves and then to sub-minutte waves, each degree of waves consists of one full cycle of motive and corrective waves. each degree of trend is labelled with a different style of label for a better understanding. If you want to trade in 4H so then you will look for and count the monthly, weekly and the daily charts is will. Hope you understand the concept of wave degrees.
Education
by TheLoserMan
Series 1 of 2: Can Turtles be Successful Traders Once Again? Flashback: I’m a novice trader in the early 1990’s and I’m hooked. Like most novice traders, I begin to mentally spend my trading profits through visions of exotic cars, mansions and trips to places I cannot pronounce. Two years into trading for my own account, I lost a lot of money. The amounts those losses totaled will remain unmentioned for fear my wife may read this post one day. But in my defense, it was not my fault. That dubious distinction belonged to two men I had never met. Their guilt was undeniable....in my mind. Those men were Richard Dennis and William Eckhardt. You see, in the 1980’s Dennis and Eckhardt decided to hatch an experiment (more on that in a moment). Let’s start with a brief background of these two co-conspirators. Richard Dennis in the 1980’s was regarded as one of, if not the best, traders in the world. You can use the Google machine to read all about these guys, but suffice to say, He was a legend. Dennis started out with a $5,000 account balance, and turned it into a $100 Million. Yeah...you read that right. William Eckhardt was a mathematician, and a trader, who like RN Elliott, developed a thesis of using probabilistic outcomes in commodity pits at the Chicago Merc. I imagine Dennis to be the Trader, and Eckhardt to be the rules-process based mathematician. Although Eckhardt did average just under 20% per year, for over 20 years. That type of consistency is as probabilistic as Dennis’ rocket ride to riches. Ok back to the experiment. Their constant debates regarding their individual trading successes turned into somewhat of a bet/experiment. Dennis believed anyone could be taught to trade for profit successfully, whereas Eckhardt believed that Dennis (in all his success) was unique. That he possessed some sort of superhero DNA for trading. Dennis initially recruited 18 individuals and only spent 2 weeks training them his methods. I’ll let you research all the details of the Turtles but suffice to say in five years they generated an aggregate total of $175 Million in profits. Now, as reasonable reader here on Trading View, I’m sure you can see why I faulted Dennis and Eckhardt for my initial losses. Clearly, I was sold an outcome that had no probability of success in reality. But in all seriousness, I think about those early days from time to time. I think about the audacity of the experiment, and the success story that followed. How inspired I was back then. However, the truth of the matter is these two gentlemen had as much to do with my losses as I had to do with their turtles' successes. ZERO. Nothing...NADA. Therein lies the first rule of trading I learned. Take personal responsibility for your losses. I only say losses because most novice traders are quick to tell stories of their successful trades. It’s the management of losses that make a good trader, not the wins. Yes, I do believe average people can be taught to trade successfully over long periods of time. Trading is hard work. I’m sure there are those out there that will comment and say, look at me, I’m knocking out of the park. My response to those individuals is, I’m truly am happy for you. But to minimize trading success to something that is easy is misleading, and potentially harmful to novice traders who may mentally spend their future easy winnings on exotic cars, mansions and travel. Only to find out the hard way, that what Momma said so many years ago is still true today. THERE ARE NO GET RICH QUICK SCHEMES. Richard Dennis ultimately flamed out and quit trading for the public after losing most of his clients investments in the crash of 1987. So, how can anyone learn to become a successful trader? You need to have the mindset of a Richard Dennis, while simultaneously having the skepticism but academic approach of a William Eckhardt. Part II of this series will be a detailed list of the things that I have learned since my early days being introduced to Dennis and Eckhardt’s teachings and how they have helped me trade for profit. Best to all, Chris
FTX:SOLUSDEducation
by maikisch
13
Trading Basics | How to Identify The Market Trend 📈📉 Hey traders, In this article, we will discuss a proven price action based way to identify the market trend. ❗️And let me note, before we start, that no matter what strategy do you use in your trading, you should always know where the market is going and what is the current trend. Your judgement should be based on strict and objective rules that proved its accuracy. There are a lot of ways to identify the market trend. One of the simplest and efficient ones is price action based method. This method relies on impulse legs. The market never goes just straight up or down, the price action always has a zigzag shape with a set of impulses and retracements. The impulse leg is a strong directional movement, while the retracement is the correctional movement within the boundaries of the impulse. 📈The market is trading in a bullish trend if 3 conditions are met: 1️⃣the price forms an initial bullish impulse, 2️⃣retraces, setting a higher low, 3️⃣then starts growing again and sets a new high with the second bullish impulse. Once these 3 conditions are met, we consider the market to be bullish, and we expect a bullish continuation in such a manner. 📉The market is trading in a bearish trend if 3 following conditions are met: 1️⃣the price forms an initial bearish impulse, 2️⃣retraces, setting a lower high, 3️⃣then drops lower and sets a new low with the second bearish impulse. Once these 3 conditions are met, we consider the market to be bearish, and we expect a bearish trend continuation. ➖The third state of the market is called consolidation. The market is trading in a consolidation if the conditions for bullish or bearish trend are not met. The price chaotically forms bullish and bearish impulses, usually trading within the range. Knowing the current trend, one always knows whether a current trading position is trend-following or counter trend, or it is a sideways consolidation trade. Learn these simple rules and try to identify the market trend with them. ❤️If you have any questions, please, ask me in the comment section. Please, support my work with like, thank you!❤️
OANDA:XAUUSDEducation
by VasilyTrader
9
Elliott Wave Cheat SheetAlthough Elliott Wave Theory is vast subject and needs in depth study, I'm sharing a cheat sheet for those who have started to learn about the same. This should help them in understanding things better. Also, try to correlate the cheat sheet with Nifty50 daily chart and be amazed to see how nicely the Elliott wave principles were followed there in the recent wave. At the same time, please use discretion while following this cheat sheet as this sheet covers only the basic aspects of Elliott Wave principles. Keep (l)earning and keep sharing!!
NSE:NIFTYEducation
by MalayKJ
3
An idea for managing transactionsThis idea helps you to know how control your positions either in profit or loss . We will tell you when you can close your position in profit and how to manage your position in loss by decreasing entry price It's all about money management that we will teach you Our strategy based on : Price action Divergence Golden EMA crosses Conversion line and base line cross Zone of buy and sell Most importantly money management We wish you could connect to circle of abundance and making a lot of money
Education
by mahababaji203
2
Wyckoffian logicWhen you understand the Wyckoffian phases of the market, you can determine when to be in or out of the market. You begin to understand how the large accounts determining market the trend, change of trend and price action. Wyckoff Phases of Accumulation Phase A: In phase A, supply has been dominant and it appears that finally the exhaustion of supply is becoming evident. The approaching exhaustion of supply or selling is evidenced in preliminary support (PS) and the selling climax (SC) where a widening spread often climaxed and where heavy volume or panicky selling by the public is being absorbed by larger professional interests. Once these intense selling pressures have been expressed, and automatic rally (AR) follows the selling climax. A successful secondary test on the downside shows less selling that on the SC and with a narrowing of spread and decreased volume. A successful secondary test (ST) should stop around the same price level as the selling climax. The lows of the SC and the ST and the high of the AR set the boundaries of the trading range (TR). Horizontal lines may be drawn to help focus attention on market behavior. It is possible that phase A will not include a dramatic expansion in spread and volume. However, it is better if it does, because the more dramatic selling will clear out more of the sellers and pave the way for a more pronounced and sustained markup. Where a TR represents a reaccumulation (a TR within a continuing up-move), you will not have evidence of PS, SC, and ST. Instead, phase A will look more like phase A of the basic Wyckoff distribution schematic. Nonetheless, phase A still represents the area where the stopping of the previous trend occurs. Trading range phases B through E generally unfold in the same manner as within an initial base area of accumulation. Phase B: The function of phase B is to build a cause in preparation for the next effect. In phase B, supply and demand are for the most part in equilibrium and there is no decisive trend. Although clues to the future course of the market are usually more mixed and elusive, some useful generalizations can be made. In the early stages of phase B, the price swings tend to be rather wide, and volume is usually greater and more erratic. As the TR unfolds, supply becomes weaker and demand stronger as professionals are absorbing supply. The closer you get to the end or to leaving the TR, the more volume tends to diminish. Support and resistance lines usually contain the price action in phase B and will help define the testing process that is to come in phase C. The penetrations or lack of penetrations of the TR enable us to judge the quantity and quality of supply and demand. Phase C:In phase C, the stock goes through testing. It is during this testing phase that the smart money operators ascertain whether the stock is ready to enter the markup phase. The stock may begin to come out of the TR on the upside with higher tops and bottoms or it may go through a downside spring or shakeout by first breaking previous supports before the upward climb begins. This latter test is preferred by traders because it does a better job of cleaning out the remaining supply of weak holders and creates a false impression as to the direction of the ultimate move. A spring is a price move below the support level of a trading range that quickly reverses and moves back into the range. It is an example of a bear trap because the drop below support appears to signal resumption of the downtrend. In reality, though, the drop marks the end of the downtrend, thus trapping the late sellers, or bears. The extent of supply, or the strength of the sellers, can be judged by the depth of the price move to new lows and the relative level of volume in that penetration. Until this testing process, you cannot be sure the TR is accumulation and hence you must wait to take a position until there is sufficient evidence that markup is about to begin. If we have waited and followed the unfolding TR closely, we have arrived at the point where we can be quite confident of the probable upward move. With supply apparently exhausted and our danger point pinpointed, our likelihood of success is good and our reward/risk ratio favorable. Phase D:If we are correct in our analysis and our timing, what should follow now is the consistent dominance of demand over supply as evidenced by a pattern of advances (SOSs) on widening price spreads and increasing volume, and reactions (LPSs) on smaller spreads and diminishing volumes. If this pattern does not occur, then we are advised not to add to our position but to look to close out our original position and remain on the sidelines until we have more conclusive evidence that the markup is beginning. If the markup of your stock progresses as described to this point, then you’ll have additional opportunities to add to your position. Your aim here must be to initiate a position or add to your position as the stock or commodity is about to leave the TR. At this point, the force of accumulation has built a good potential as measured by the Wyckoff point-and-figure method. In phase D, the markup phase blossoms as professionals begin to move into the stock. It is here that our best opportunities to add to our position exist, just as the stock leaves the TR. Phase E: Depicts the unfolding of the uptrend; the stock or commodity leaves the trading range and demand is in control. Sell offs are usually feeble. Wyckoff Accumulation Events PS: Preliminary support, where substantial buying begins to provide pronounced support after a prolonged down-move. Volume increases and price spread widens, signaling that the down-move may be approaching its end. SC: Selling climax, the point at which widening spread and selling pressure usually climaxes, as heavy or panicky selling by the public is being absorbed by larger professional interests at or near a bottom. Often price will close well off the low in a SC, reflecting the buying by these large interests. AR: Automatic rally, which occurs because intense selling pressure has greatly diminished. A wave of buying easily pushes prices up; this is further fueled by short covering. The high of this rally will help define the upper boundary of an accumulation TR. ST: Secondary test, in which price revisits the area of the SC to test the supply/demand balance at these levels. If a bottom is to be confirmed, volume and price spread should be significantly diminished as the market approaches support in the area of the SC. It is common to have multiple STs after a SC. Shakeouts: (and or Springs) usually occur late within a TR and allow the stock’s dominant players to make a definitive test of available supply before a markup campaign unfolds. A “spring” takes price below the low of the TR and then reverses to close within the TR; this action allows large interests to mislead the public about the future trend direction and to acquire additional shares at bargain prices. A terminal shakeout at the end of an accumulation TR is like a spring on steroids. Shakeouts may also occur once a price advance has started, with rapid downward movement intended to induce retail traders and investors in long positions to sell their shares to large operators. However, springs and terminal shakeouts are not required elements.. Test: Large operators always test the market for supply throughout a TR (e.g., STs and springs) and at key points during a price advance. If considerable supply emerges on a test, the market is often not ready to be marked up. A spring is often followed by one or more tests; a successful test (indicating that further price increases will follow) typically makes a higher low on diminished volume. SOS: Sign of strength, a price advance on increasing spread and relatively higher volume. Often a SOS takes place after a spring, validating the analyst’s interpretation of the prior price action. LPS: Last point of support, the low point of a reaction or pullback after a SOS. Backing up to an LPS means a pullback to support that was formerly resistance, on diminished spread and volume. On some charts, there may be more than one LPS, despite the ostensibly singular precision of this term. BU: Back-up. This term is short-hand for a colorful metaphor coined by Robert Evans, one of the leading teachers of the Wyckoff method from the 1930s to the 1960s. Evans analogized the SOS to a “jump across the creek” of price resistance, and the “back up to the creek” represented both short-term profit-taking and a test for additional supply around the area of resistance. A back-up is a common structural element preceding a more substantial price mark-up, and can take on a variety of forms, including a simple pullback or a new TR at a higher level. Wyckoff Phases of Distribution Phase A: In Phase A, demand has been dominant and the first significant evidence of demand becoming exhausted comes at preliminary supply (PSY) and at the buying climax (BC). It often occurs in wide price spread and at climactic volume. This is usually followed by an automatic reaction (AR) and then a secondary test (ST) of the BC, usually upon diminished volume. This is essentially the inverse of phase A in accumulation. As with accumulation, phase A in distribution price may also end without climactic action; the only evidence of exhaustion of demand is diminishing spread and volume. Where redistribution is concerned (a trading range within a larger continuing down-move), you will see the stopping of a down-move with or without climactic action in phase A. However, in the remainder of the trading range (TR) for redistribution, the guiding principles and analysis within phases B through E will be the same as within a TR of a distribution market top. Phase B: The building of the cause takes place during phase B. The points to be made here about phase B are the same as those made for phase B within accumulation, except clues may begin to surface here of the supply/demand balance moving toward supply instead of demand. Phase C: One of the ways phase C reveals itself after the standoff in phase B is by the sign of weakness (SOW). The SOW is usually accompanied by significantly increased spread and volume to the downside that seem to break the standoff in phase B the SOW may or may not “fall through the ice,” but the subsequent rally back to a “last point of supply” (LPSY), is usually unconvincing for the bullish case and likely to be accompanied by less spread and/or volume. Last point of supply gives you your last opportunity to exit any remaining longs and your first inviting opportunity to exit any remaining longs and your first inviting opportunity to take a short position. An even better place would be on the rally that tests LPSY, because it may give more evidence (diminished spread and volume) and/or a more tightly defined danger point. An upthrust is the opposite of a spring. It is a price move above the resistance level of a trading range that quickly reverses itself and moves back into the trading range. An upthrust is a bull trap — it appears to signal a start of an uptrend but in reality marks the end of the up-move. The magnitude of the upthrust can be determined by the extent of the price move to new highs and the relative level of volume in that movement. Phase C may also reveal itself by a pronounced move upward, breaking through the highs of the trading range. This is shown as an upthrust after distribution (UTAD). Like the terminal shakeout in the accumulation schematic, this gives a false impression of the direction of the market and allows further distribution at high prices to new buyers. It also results in weak holders of short positions surrendering their positions to stronger players just before the down-move begins. Should the move to new high ground be on increasing volume and relative narrowing spread, and price returns to the average level of closes of the TR, this would indicate lack of solid demand and confirm that the breakout to the upside did not indicate a TR of accumulation, but rather a formation of distribution. Successful understanding and analysis of a trading range enables traders to identify special trading opportunities with potentially very favorable reward/risk parameters. When analyzing a trading range, we are first seeking to uncover what the law of supply and demand is revealing to us. However, when individual movements, rallies, or reactions are not revealing with respect to supply and demand, it is important to remember the law of effort versus result. By comparing rallies and reactions within the trading range to each other in terms of price spread, volume, and time, additional clues may be discovered as to the stock’s strength, position, and probable future course. It will also be useful to employ the law of cause and effect. Within the dynamics of a trading range, the force of accumulation or distribution gives us the cause and the potential opportunity for substantial trading profits. The trading range will also give us the ability, with the use of point-and-figure charts, to project the extent of the eventual move out of the trading range and will help us determine if those trading opportunities favorably meet or exceed our reward/risk parameters. Phase D: Phase D arrives and reveals itself after the tests in phase C show us the last gasps or the last hurrah of demand. In phase D, the evidence of supply becoming dominant increases either with a break through the ice or with a further SOW into the trading range after an upthrust. In phase D, you are also given more evidence of the probable direction of the market and the opportunity to take your first or additional short positions. Your best opportunities are at rallies representing LPSYs before a markdown cycle begins. Your legging in of the set of positions taken within phases C and D represents a calculated approach to protect capital and maximize profit. It is important that additional short positions be added or pyramided only if your initial positions are in profit. Phase E: Depicts the unfolding of the downtrend; the stock or commodity leaves the trading range and supply is in control. Rallies are usually feeble. Wyckoff Distribution Events PSY: Preliminary supply, where large interests begin to unload shares in quantity after a pronounced up-move. Volume expands and price spread widens, signaling that a change in trend may be approaching. BC: Buying climax, during which there are often marked increases in volume and price spread. The force of buying reaches a climax, and heavy or urgent buying by the public is being filled by professional interests at prices near a top. A BC often occurs coincident with a great earnings report or other good news, since the large operators require huge demand from the public to sell their shares without depressing the stock price. AR: Automatic reaction. With demand substantially diminished after the BC and heavy supply continuing, an AR takes place. The low of this selloff helps define the lower boundary of a distribution TR. ST: Secondary test, in which price revisits the area of the BC to test the demand/supply balance at these price levels. If a top is to be confirmed, supply will outweigh demand, and volume and spread should decrease as price approaches the resistance area of the BC. A ST may take the form of an upthrust (UT), in which price moves above the resistance represented by the BC and possibly other STs, then quickly reverses to close below resistance. After a UT, price often tests the lower boundary of the TR. SOW: Sign of weakness, observable as a down-move to (or slightly past) the lower boundary of the TR, usually occurring on increased spread and volume. The AR and the initial SOW(s) indicate a change of character in the price action of the stock: supply is now dominant. LPSY: Last point of supply. After testing support on a SOW, a feeble rally on narrow spread shows that the market is having difficulty advancing. This inability to rally may be due to weak demand, substantial supply or both. LPSYs represent exhaustion of demand and the last waves of large operators’ distribution before markdown begins in earnest. UTAD: Upthrust after distribution. A UTAD is the distributional counterpart to the spring and terminal shakeout in the accumulation TR. It occurs in the latter stages of the TR and provides a definitive test of new demand after a breakout above TR resistance. Analogous to springs and shakeouts, a UTAD is not a required structural element: the TR in Distribution. AR - Automatic rally or reaction BC - Buying Climax BOI - Backing upto ice BTI - Breaking the ice BUEC - Backup to edge of creek CREEK - Critical support FTI - First time over ice ICE - Critical resistance JAC - Jumping across the creek (or JOC) LPS - Last point of Support (Demand) LPSY - Last point of Supply MD - Mark down MU - Mark up PS - Preliminary support (Demand) PSY - Preliminary supply SOS - Sign of strength SOW - sign of weakness ST - Secondary test TSO - Terminal shake out (Spring) TUT - Terminal thrust UTAD - Up thrust after distribution SC - Selling Climax TR - Trading Range UT - Up thrust Best regards EXCAVO
BITSTAMP:BTCUSDEducation
by EXCAVO
95
GOLD - The Entire Wave Caught 🔥In March this year, we posted a higher timeframe analysis where we identified that price was in wave 4 and that we were in an ABC correction. See full post below: Once we identified where we are in the wave sequence, it just came down to counting the waves correctly and trading according to our trading rules. We know that Wave C consists of 5 waves and follows the impulse schematic. Waves 1, 3 and 5 have 5 waves. Waves 2 and 4 have 3 waves. Ofcourse there are complexities where there are variations of waves within waves. However, once you understand the fundamental, you can slowly work your way down to lower timeframe and know whats next. That is exactly what we did. We followed the basic fundamental rules of Elliott Waves and worked our way through the entire wave C. How do we enter? Our entries are almost always trendline break entries. A trendline break tells us that momentum is shifting in the other direction and there are strict parameters for entry and stoploss which we don't deviate from. Entry: Break of trendline Bullish entry stoploss: below the candles once trendline breaks Bearish entry stoploss: above the candles before the trendline breaks If you go through the ideas in the chart, you will see that our entry is almost always trendline break entries. People may say trendlines do not work - sometimes it doesn't... if not used correctly. We mostly use trendlines when a correction is already formed. Using a trendline here to catch the breakout is perfect. The market isn't static. Things change. You will see that whilst the overall analysis remained the same, the lower timeframe analysis changed as moves overextend and its our job as traders to adapt to these changes. Do let us know what you think. As always, trade safe!
OANDA:XAUUSDEducation
by WicktatorFX
19
ELLiOTT WAVE DIAGONAL Motive Wave: DIAGONAL Rules:All diagonals consist of 5 waves Diagonals can be ‘leading’ or ‘ending’ diagonals, depending on whether they form at the start or end of a trend. Diagonals therefore can only form in the positions of wave 1 (leading) or 5 (ending) of an impulse, or the positions of wave A (leading) or C (ending) of a zigzag . Within an ending diagonal , all 5 waves must be zigzags (simple-, double-, and triple-zigzags are all valid) Within a leading diagonal , at least waves 2 and 4 must be zigzags (simple-, double-, and triple-zigzags are all valid). Waves 1, 3 and 5 can be impulses or zigzags. (If 1, 3, and 5 are impulses, be aware that it could easily be a 1-2, 1-2, 1-2 sequence instead of a diagonal) Wave 2 must not retrace more than 100% of wave 1 Wave 4 must overlap with wave 1(please note that opinions differ over this rule. There are some Elliott Wave researchers who believe that ending and leading diagonals can be valid without wave 4 needing to move into territory of wave 1, although they still consider it unusual) Wave 4 never moves beyond the end of wave 2 Leading and expanding diagonals must not have a truncated 5th wave. Contracting diagonals always have a shorter wave 3 than wave 1 (in terms of percentage gain/loss) Contracting diagonals always have a shorter wave 5 than wave 3 (in terms of percentage gain/loss) Contracting diagonals always have a shorter wave 4 than wave 2 (in terms of percentage gain/loss) Expanding diagonals always have a longer wave 3 than wave 1 (in terms of percentage gain/loss) Expanding diagonals always have a longer wave 5 than wave 3 (in terms of percentage gain/loss) Expanding diagonals always have a longer wave 4 than wave 2 (in terms of percentage gain/loss) Guidelines: Contracting diagonals form within two converging trend lines (contracting wedge ) Contracting diagonals can overshoot its trend line during wave 5 (called throw-over) and still be valid as long as wave 5 remains smaller than wave 3 Contracting ending diagonals can also undershoot its trend line during wave 5 (truncation). Contracting ending diagonals should always show a corresponding decrease in momentum as they progress towards their culmination. Many small candles that take a lot of time to gain further ground is a good sign that an ending diagonal is indeed occurring. Conversely, strong big candles within a potential diagonal formation should be a warning sign that you are probably witnessing a 1-2, 1-2, 1-2 extension of the trend, and therefore not an ending diagonal . Expanding diagonals form within two diverging trend lines (expanding wedge ). They are more rare than contracting diagonals Wave 2 and 4 of any diagonal very often retrace their wave 1 and 3 much deeper when compared to wave 2 and 4 of impulses The internal zigzags of any diagonal can sometimes subdivide into more complex double or triple zigzags Any diagonal can begin to be confirmed with higher certainty once wave 4 is close to being complete Diagonals are more rare in general (although they do occur quite frequently within sub-waves of very small wave degrees that are visible on timescales of M15 and lower) If wave 1 is a leading diagonal , wave 3 is usually extended. A place to watch out for potential expanding leading diagonals is at the start of stock market declines (due to the opposing forces that are in play during this transitional period). Diagonals occur because of transitory forces of trend changes act against each other Ending diagonals are followed by a strong reversal most of the time Elliott Wave and Fibonacci Retracement with Extension Guidelines: Refer to image for key retracements and extension targets Correctiv
Education
by Mr16K