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Wave Analysis

mastering elliot waves. Rules of Retracements.After sticking to the rule of proportioning (using 45 degree angle on m1), and rule of observations (labeling past waves m0, m-1, and future waves m2, m3 properly relative to m1), now we want to measure the retracements of these waves. The author of this book suggests people should use rulers and protractors and all that other caveman stuff. Sometimes technology isn't such a bad thing is it? We can use the Fibonacci retracement tool to make short work of the retracement percentages. Then we can call something "rule 5, condition d" for example, based off these measurements. From there we go to a list of pre-established logical extensions and ..... that's as far as I got today. Next time, I can hazard a guess, I will be covering the logical extensions for each separate rule/condition pairing. Whatever the author thinks is important to cover is what I will be sharing here as well.
Education
by emehoke
Playing around with ElliotHere is my take on playing around with Elliot. My assumptions are: Institutional trades started to make moves towards the end or after the 2017 bear market and Covid a Black Swan and if it did not happen there wouldn't have been the big dip. So my 0 for Elliot is the bear market low. When calc. 1& 2 at the first reversal. March 2020 shows concern, but I wrote this off as a market collapse and not orchestrated-Black Swan. Then used Fib levels to verify the 3, and 4 retracement and confirm the 5. Looking at the peak a 5, I could then use that as a 0 and start again. All levels match up where we are in a weekly 4 and about to drop down even lower when the 4 is finished between my 2 orange levels.
COINBASE:BTCUSDEducation
by sethers_0908
8
Mastering Elliot waves intro. basic stuff.The big takeaway for me was that this is a very complex and all encompassing way of chopping up market patterns. There are a lot of people who don't think it's a good way of doing it, and there are a lot of people who really put a lot of time into it and mastered it, and in doing so, made it work for them. It's not an easy discipline to learn, and it can take years. yikes. Some portion of my attention span disbanded after reading that part. For the synapses that stuck around: Nothing wild was introduced, and we aren't doing any calculations. Simply acknowledging that there are forces of nature that we can't really completely understand, and market behavior is one of them. We can give it some general guidelines, however, and that's what elliot waves attempt to do. We are on the lookout for structural patterns that upon completion lead to directional movement. In order to get there, we start with waves. The simplest waveform is a monowave, which is just the point between pivots on a chart. It can be big or small or whatever. It is the smallest organization of chart-matter. Connecting monowaves makes polywaves. Poli -> Multi -> Macro. When saying a wave is a certain degree in relation to other waves is a method of self-organization that we basically have to do for no other reason than because our brains work that way. Omnipotence is not in the forecast for a couple zillion more years. Add it all together, and patterns that illustrate the confines of our thought processes begin to appear on the chart. The end goal is that these parts of our brain eventually callous to the point where we can see the patterns and respond to them rather than being caught up in them. For now, we are just happy if you understand that price movement is composed of waves, and that these waves are identified in relation to one another. (impulse, correction, degree). For the record I don't know who I'm referring to when I say 'we'.
COMEX:GCQ2021Education
by emehoke
Elliot Waves Complete Guide | Chapter 4.2 - "Channeling"Hello Traders. Welcome to Chapter 4.2, where we will be learning about channeling in Elliott Waves (also known as, parallel channels) - something that many of you are probably already doing in your daily technical analysis, but probably have not known that it could be used within the Elliott Wave theory. This method is going to give us an extra edge when it comes to pinpointing the end of certain waves in certain patterns, basically a way to predict the future in some ways by reducing some of the probabilities of unknown trajectory of waves. 📚 Chapter 4 Glossary: 4.1 Alternation 📖 4.2 Channeling 4.3 Psychology 4.4 Fib-Ratio 4.5 Motive Wave Multiples 4.6 Corrective Wave Multiples ----- What is Channeling, or Parallel Channels? One of the major guidelines or rules within in the Elliot Wave theory is that two of the impulse waves (please refer to chapter 1) in a five-wave basic structure will tend to be equal. This is true in a normal five-wave basic structure or in a basic structure where we have one extended wave. In even more simpler terms, we almost always will have two impulse waves that will be similar in length. When we have the relationship between two waves inside the parallel structure, the ends of these waves can be calculated in points or percentages of extensions like the 127.2%, 161.8% (the golden fib zone! - more on the fibs in the next chapter). Most of the time these two waves will be equal in length, and if one wave was 100 points longer, then there is a very high probability that another wave will be 100 ticks long (also known as a measured move). And of course you already know that if the first wave is 90 points and the second wave is 100 points, there’s a high probability that the fifth wave will be an extended wave, and etc. Again, if you are lost, I highly recommend you go back to reading chapters 1 and 2. So since we have an arithmetic relationship (or equality) within the structure in terms of line connections, the upper and lower boundaries of the impulse waves can be marked by two major trendlines. EW Traders will often draw a temporary channel when enough data is given, and what we have here is actually a temporary channel in the chart above. This is not a fancy term - this merely means you are drawing the channel ahead of time since you have a rough idea of the 3rd wave already being drawn out. You then can visually predict by connecting two or three of the major points to create a channel to help you assume where the next possible wave will end by simple support. You can see that the next wave will be a down move and then we have to complete the 4th wave. We don’t know if we are in a five-wave basic structure just yet, but the channel will help us validate this idea. Furthermore, since the two waves inside of the structure tend to be equal and the longest wave here is the third wave, you can see that we can have a predicted fourth wave that will bounce at the channel support due to the 'temporary' channel support line we created as we can see in the chart, and the fifth wave will be equal in length of the wave 1, and will end up most likely at the channels resistance in the upper boundary. What makes a parallel channel invalidated? Well, that's easy - if price breaks the channel prematurely, and continues to fall, this will invalidate our count and the idea of channeling. If the fourth wave doesn’t end at a point touching the lower boundary of the support line channel, you must reconstruct it by connecting the ends of wave 2 and 4, to correctly estimate the end of wave 5. Then draw a parallel line for the upward boundary from the end of wave 3. Parallel channels help INCREASE your probability of wave counts, and also have a good direction of where simply support may be!
BITSTAMP:BTCUSDEducation
by XForceGlobal
14
How to make money with price actionSo you want to get into price action? Not fundamentals ey. But then one HAS to do all this backtesting, there is no dodging it. Can't go into "TA" to dodge the FA work, and then want to also dodge the stat work xd No magic trick here. Let's get started immediately. EURUSD 2020 covid trend (can't 100% dodge fundas, always good to know why we're going in a direction): EURUSD 2018-2019 "thing" (trade war uncertainty and erratic tweets): EURUSD 2017 trend: We are starting to see trends last 1-2 years in recent history, so not much point looking at a 5Y chart. It's also silly to be super zoomed in on some "intraday" or "swing trading" chart with no clue what is really going on. EURUSD 2015-2016 ranging 2 years: EURUSD 2014 violence some may remember: Day gamblers looking for "10 pips" that hold bags were happy to go through a 3500 pips loss. Still has not recovered. I can only imagine the incredible pain loss averse gamblers must have gone through. The pain not only never ends but it just keeps getting worse and worse and worse. Just no chance to breathe, only unbearable pain. Well that's interesting, why am I licking my lips? EURUSD in 2012-2013 does not look very fun: EURUSD 2011 downtrend Hey, starting to see some recurrent things here... EURUSD 2010 uptrend Backtesting tip: Doing it while playing a turn based game (alt tab between turns), or watching something that requires little attention, working out (between sets), "afk farm" games too... No one lasts with "motivation", we all have to find tricks. EURUSD 2010 downtrend And before that, we go to the 2000s era where FX was popular with hedge funds and trends lasted more than 1 year. 2008-2013 saw most FX funds disappear. Another tip: Maybe fundamentals can help predict when a trend will last, and avoid failing on this sad 3 impulses downtrend. It worked for the Yen a few years ago when the BOJ almost literally told traders "Hey if you short our currency we will give you money". And another tip: Eyeball backtesting. Have an idea? Want to know if it is worth digging in? Well don't just go full fanatical try hard! Do not spend hours and hours writing every detail in excel. Eyeball it with approximate numbers. Takes seconds. Then 2 choices appear: - Onto something ===> Go for the details - Nah it's nothing ===> Congratulation you did not waste tons of time on nothing (small time loss) Limiting losses, it's also valid with your time. How about I go look at the GBPUSD in the 80s ey? GBPUSD downtrend in 1980-1981 Aaaaaaaaaaand same story as usual ;) Repeat this 10 times, for a total of about 100 excel lines and ~25 trends. Then write some rules, and go backtest them on other charts. Because yes, the major currency pairs (USD, EUR, JPY, GBP, AUD, CAD, CHF, NZD, CNH, MXN, SEK) more or less work the same, but don't take my word for it. Choices appear. Does the aspiring money manager want to only go for 3 impulses? And then miss all the big winners? Does he want to sacrifice winrate for bigger reward to risk ratios? Does he want a higher winrate (noob). Sometimes there are 5 impulses, does he (or she) go for 5? Or consider it is worth it to give up some winners? Weak hands or strong hands once in a trending winner? Most people have weak hands with winners but doesn't mean one has to absolutely ALWAYS hold. Holding all the time and letting it retrace hard would probably be a mistake. The noob that took the time (really it would barely take a few days of honest work) could already get started. I said get started, I don't know if it would make money. Maybe? Clearly 2R is a beginner thing. What if you could get 38% winrate with 2R and 22% winrate with 4R! Clearly worth it, but as always the majority of people are loss averse and choose the bad choice, trading is just not for them. One has to some stats, have a good working memory for many reasons, be able handle numbers like "I3 - .6 - Fast - EURUSD" (2 variables 2 constants). If someone cannot quickly juggle with numbers this is the wrong job. The variance is important for example, if an average pullback is .5 but 45% are in the .25-.45 range, and 45% in the > .8 range, here there are 2 groups to separate. Obviously here we would want to only go for the .25-.45 range, get a 4 or 5 or even greater reward to risk, let losers chase high winrate with gigantic stops. If 30% of the time the price bottoms in a .2 range and extends 1 at least, here that's a 5 risk to reward on double the breakeven winrate. Then what happens to the 70% who cares? A few bottom further away, a few turn into a new opposite trend, a few go sideways, they all stink. All for illustrative purposes, but it's typically what happens. I don't really know. What about some ways to increase the winrate, tips, and for those that have a hard time sticking to rules, especially cutting losses and holding winners? Surely, Mr Renev that said motivation did not work knows some tricks to fix all of that. Find tricks... I know no tricks in fixing gross mediocrity, just follow the rules, non negotiable. It's really simple. Can't do it ==> Wrong job. Can mediocre make money? I don't know I do not deal with mediocre. Also we can try to zoom in, but ideally only after having mastered the timeframe presented in this article. This is what I do, I zoom in. Let's take my 2020 idea "The pound is a 500 years old ponzi going to zero" So here is the full chart (1 year): Go H4 on I3: Then we can even go to H1: The target is 450 "pips" which for GBPAUD is in the 1 week ATR range, but better than the average. In a recent "tips" idea I showed: - Day gamblers working on a 8 hour ATR realistically need a PF of 1.15 (very best scenario) - 1.25 just to breakeven! - Swing Gamblers on a 2D ATR need a PF of 1.05 on EURUSD to breakeven. - And I won't look at scalpers because they can't possibly be serious. I think they are actually trolls. With this weekly ATR a PF of 1.02-1.03 is the breakeven rate. I am not bleeding much money compared to going long term. Day gamblers miss out on so much, AND they need an exceptional profit factor, ok not that amazing either (for day gambling it is) JUST TO BREAKEVEN. All that wasted money, how does it not drive them nuts? They're just throwing away a 20% margin. I just want to pull my eyelids out. To make money with Forex, many questions will have to be answered, and for this only one way, as we say in France "Va falloir aller au charbon!" (literally "Have to go to the coal"), means it will take time and effort and actively getting things done. So many questions: What trends can be eliminated? What trends SHOULD be eliminated? What impulses to go for? What is the optimal WR & RR compromise area? Do I just go for ABC first? Where to exit? What are solid Support and Resistance? Do I go for uptrends starting from a multi year low only (to dodge ranges)? How many ATR are each wave? What does 2 extend to? What other questions could I ask? How do I get inspiration to find more questions? Do I exploit this strategy enough? Can I optimise it more or should I look for something else? Hey and each of these questions will direct to more questions. "When I have this, this, and this, where do I exit". Like "Where I'm in the presence of a creeper trend", "fast trend", "clean trend"... Each trend has its own set of questions, all the same I listed, plus a few specific ones. It is essential to approach the study of markets in general and charts more specifically in manageable chunks. All while following economic news and checking on charts regularly. A day that makes sense could be one with 4 hours of backtesting, 4 hours of analysing charts, 4 hours of "fun" watching videos and reading and writing (all about investing), and 4 hours of time to eat and do unrelated stuff. All of this for 1 simple strategy. Answering these questions is a task to accomplish over years.
Education
by MrRenev
EDUCATION - Rising & Falling Wedges - Reversal PatternsWhat is an ascending/descending correction? The most common reversal pattern is the rising and falling wedge, which typically occurs at the end of a trend. The pattern consists of two trendiness which contract price leading to an apex and then a breakout appears. Rising Wedge – Bearish Reversal The ascending reversal pattern is the rising wedge which consists of higher highs and higher lows whilst losing momentum to the upside. Price contracts and eventually has a bearish break. Falling Wedge – Bullish Reversal The falling wedge reversal pattern occurs at the end bear run and indicates that price is ready to reverse. Again, price contracts and then eventually breaks out upwards. There are 2 types of ways we can trade wedge patterns; Risky Entry & Safe Entry. See below for the pros and cons for both and how to enter them __________________________________________________________________ Risk Entry: The reason why it is called a risk entry is because we haven't got many confirmations apart from the third touch of the trendline (as indicated in the chart above). Price may have the potential to go past the trendline for a deeper correction before moving up hence why this is called a risk entry. Whereas for the safe entry, the confirmation would be the break of the wedge. How to trade using Risk Entry: Wait for price to bounce off the trendline and then enter with stops below/above the correction depending on whether it’s a rising wedge or falling wedge. One of the advantages of doing a risk entry is that we can have small stop loss and have a great risk:reward ratio. Also, we can gain an entry at the start of the move and have massive gains! Safe Entry: Safe entry requires more than one confluence and requires confirmation. One of the confirmations of the safe entry is the third touch bounce and then another confirmation is when price breaks the correction which confirms that the structure has changed and that we are in a reversal. How to trade using Safe Entry: For a safe entry, enter when price has broken the correction with stops above/below the correction. Please note that with this entry method, the stoploss will be greater. The disadvantage to using a safe entry is that we require a bigger stop loss which makes the risk:reward ratio not as great as the risk entry. However, the probability of the trade succeeding is higher. RISING WEDGE EXAMPLES RISK ENTRY SAFE ENTRY FALLING WEDGE EXAMPLES RISK ENTRY SAFE ENTRY
Education
by Altsignals
1
EDUCATION - Rising & Falling Wedges - Reversal PatternsWhat is an ascending/descending correction? The most common reversal pattern is the rising and falling wedge, which typically occurs at the end of a trend. The pattern consists of two trendiness which contract price leading to an apex and then a breakout appears. Rising Wedge – Bearish Reversal The ascending reversal pattern is the rising wedge which consists of higher highs and higher lows whilst losing momentum to the upside. Price contracts and eventually has a bearish break. Falling Wedge – Bullish Reversal The falling wedge reversal pattern occurs at the end bear run and indicates that price is ready to reverse. Again, price contracts and then eventually breaks out upwards. There are 2 types of ways we can trade wedge patterns; Risky Entry & Safe Entry. See below for the pros and cons for both and how to enter them __________________________________________________________________ Risk Entry: The reason why it is called a risk entry is because we haven't got many confirmations apart from the third touch of the trendline (as indicated in the chart above). Price may have the potential to go past the trendline for a deeper correction before moving up hence why this is called a risk entry. Whereas for the safe entry, the confirmation would be the break of the wedge. How to trade using Risk Entry: Wait for price to bounce off the trendline and then enter with stops below/above the correction depending on whether it’s a rising wedge or falling wedge. One of the advantages of doing a risk entry is that we can have small stop loss and have a great risk:reward ratio. Also, we can gain an entry at the start of the move and have massive gains! Safe Entry: Safe entry requires more than one confluence and requires confirmation. One of the confirmations of the safe entry is the third touch bounce and then another confirmation is when price breaks the correction which confirms that the structure has changed and that we are in a reversal. How to trade using Safe Entry: For a safe entry, enter when price has broken the correction with stops above/below the correction. Please note that with this entry method, the stoploss will be greater. The disadvantage to using a safe entry is that we require a bigger stop loss which makes the risk:reward ratio not as great as the risk entry. However, the probability of the trade succeeding is higher. RISING WEDGE EXAMPLES RISK ENTRY SAFE ENTRY FALLING WEDGE EXAMPLES RISK ENTRY SAFE ENTRY
Education
by Altsignals
1
The Basics - Trend LinesTrend lines are used in technical analysis to define an uptrend or downtrend. Traditionally, uptrend lines are made by drawing a straight line through a series of ascending higher troughs (lows). ... With downtrends, trend lines are formed by drawing a straight line through a series of descending lower highs. In an uptrend, the “imaginary line” acts as support and in a downtrend, the line connecting the points at swing highs become the resistance. Although we can go into what and why – the logic for trend line, is to keep it simple. It’s another subjective area and people like to spot patterns. It’s human nature. This shows in it's most basic form the concept of a trend line. In an uptrend we want to see, higher highs as well as higher lows as shown below; And in a down trend, the opposite is true - Lower highs & lower lows to create the pattern as per main image of this post. Many other techniques and indicators use this concept, and perhaps the most famous being Elliott waves. Here's a post on Elliott basics; This then all points back to Dow Theory - where markets have 3 cycles and 3 waves (another lesson for another time) in short; Here's also a post covering the Dow basics; You can also use Moving averages as part of "working out the trend" And her is another simple guide to MA's (moving Averages) We thought it would be interesting to post, more of a beginners post that our usual stuff. Hope this helps some of the newer traders. 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.
FX:XAUUSDEducation
by Mayfair_Ventures
8
💨𝙀𝙡𝙡𝙞𝙤𝙩𝙩 𝙒𝙖𝙫𝙚 𝙋𝙖𝙩𝙩𝙚𝙧𝙣: 𝙏𝙧𝙞𝙖𝙣𝙜𝙡𝙚🌊●●● 𝙏𝙧𝙞𝙖𝙣𝙜𝙡𝙚 (T) ❗❗ 𝙂𝙚𝙣𝙚𝙧𝙖𝙡 𝙧𝙪𝙡𝙚𝙨 ● A triangle always subdivides into five waves. ● At least four waves among waves A , B , C , D and E are subdivided into a single zigzag. ● A triangle never has more than one complex subwave, in which case it is always a multiple zigzag or a triangle. ❗ 𝙂𝙚𝙣𝙚𝙧𝙖𝙡 𝙜𝙪𝙞𝙙𝙚𝙡𝙞𝙣𝙚𝙨 ● Usually, wave C subdivides into a "multiple zigzag" that is longer lasting and contains deeper percentage retracements than each of the other subwaves. ● Usually, wave D subdivides into a "multiple zigzag" that is longer lasting and contains deeper percentage retracements than each of the other subwaves. ● Alternating waves of a triangle may be in Fibonacci proportion to each other by a ratio of 0.618 for contracting triangles and 1.618 for expanding triangles. For example, in a contracting triangle, look for wave C to equal 0.618 of wave A . ● A triangle can be wave 4 impuls , wave B of a zigzag, wave X of a double or second wave of an X of a triple zigzag, sub-wave C , D or E of a triangle and the last structure of a combination . ●● 𝘾𝙤𝙣𝙩𝙧𝙖𝙘𝙩𝙞𝙣𝙜 𝙏𝙧𝙞𝙖𝙣𝙜𝙡𝙚 (Contr.T — CT) ❗❗ 𝙍𝙪𝙡𝙚𝙨 ● Wave C never moves beyond the end of wave A , wave D never moves beyond the end of wave B , and wave E never moves beyond the end of wave C . The result is that going forward in time, a line connecting the ends of waves B and D converges with a line connecting the ends of waves A and C . ● Waves A and B never subdivide into a triangle. ● In a running triangle, wave B should be no more than twice as long as wave A . (Q&A EWI) ❗ 𝙂𝙪𝙞𝙙𝙚𝙡𝙞𝙣𝙚𝙨 ● Sometimes one of the waves, usually wave C , D or E , subdivides into a contracting or barrier triangle. Often the effect is as if the entire triangle consisted of nine zigzags. ● About 60% of the time, wave B goes beyond the beyond the start of wave A . When this happens, the triangle is called a running triangle. ●● 𝘽𝙖𝙧𝙧𝙞𝙚𝙧 𝙏𝙧𝙞𝙖𝙣𝙜𝙡𝙚 (Barr.T — BT) ❗❗ 𝙍𝙪𝙡𝙚𝙨 ● Wave C never moves beyond the end of wave A , wave D never moves beyond the end of wave B , and wave E never moves beyond the end of wave C . The result is that going forward in time, a line connecting the ends of waves B and D converges with a line connecting the ends of waves A and C . ● Waves B and D end at essentially the same level. ● In a running triangle, wave B should be no more than twice as long as wave A . (Q&A EWI) ❗ 𝙂𝙪𝙞𝙙𝙚𝙡𝙞𝙣𝙚𝙨 ● About 60% of the time, wave B goes beyond the beyond the start of wave A . When this happens, the triangle is called a running barrier triangle. ● When wave 5 follows a triangle, it is typically either a brief, rapid movement or an exceptionally long extension. ☝ 𝙉𝙤𝙩𝙚𝙨 ● We have yet to observe a 9 -wave barrier triangle, implying that this form may not extend. ●● 𝙀𝙭𝙥𝙖𝙣𝙙𝙞𝙣𝙜 𝙏𝙧𝙞𝙖𝙣𝙜𝙡𝙚 (Exp.T — ET) ❗❗ 𝙍𝙪𝙡𝙚𝙨 ● Wave C , D and E each moves beyond the end of the preceding same-directional subwave. (The result is that going forward in time, a line connecting the ends of waves B and D diverges from a line connecting the ends of waves A and C .) ● Subwaves B , C and D each retrace at least 100 percent but no more than 150 percent of the preceding subwave. ❗ 𝙂𝙪𝙞𝙙𝙚𝙡𝙞𝙣𝙚𝙨 ● Subwaves B , C and D usually retrace 105 to 125 percent of the preceding subwave. ☝ 𝙉𝙤𝙩𝙚𝙨 ● No subwave has yet been observed to subdivide into a triangle. Elliott Wave Principal 2005 and Q&A EWI .
BITSTAMP:BTCUSDEducation
by TradeWaves-EWA
4
📚SPOT A MARKET REVERSAL WITH CANDLESTICK PATTERNS📚 Candlestick patterns are frequently applied for the identification of early trend reversal signs . Here are the three most common reversal formations that you may encounter trading different markets: 1️⃣ - Equal inside bar formation Once the price reaches some important pivot point quite often it tends to form a weak candle with a long rejection wick (long in comparison to the buddy of the candle). In case if the consequent candle's body has the same range, we call that the equal inside bar . It can be treated as the reversal formation ONLY with additional confirmation. Without an additional trigger, chances will be high that the market will start a sideways movement instead . 2️⃣ - Engulfing candle Once the price reaches some important pivot point quite often it tends to form a weak candle with a long rejection wick (long in comparison to the buddy of the candle). In case if the consequent candle's body engulfs (has a bigger range) the previous candle, we call that the engulfing candle . By itself, it is a quite strong reversal signal and can be applied as a trigger for opening a trading position. 3️⃣ - Engulfing candle (2X) Sometimes, the engulfing candle engulfs not only the previous candle but also one more preceding one . We also can call such a candle a high momentum candle . It is considered to be the strongest reversal formation (among these 3) and can be applied as a signal for a trade entry. ❗️ Remember that candlestick patterns work only on strong pivots/structure levels. Being formed on random levels, the performance of these formations is relatively low. ❤️Please, support this idea with a like and comment!❤️
FOREXCOM:XAUUSDEducation
by VasilyTrader
18
📚SPOT A MARKET REVERSAL WITH CANDLESTICK PATTERNS📚 Candlestick patterns are frequently applied for the identification of early trend reversal signs . Here are the three most common reversal formations that you may encounter trading different markets: 1️⃣ - Equal inside bar formation Once the price reaches some important pivot point quite often it tends to form a weak candle with a long rejection wick (long in comparison to the buddy of the candle). In case if the consequent candle's body has the same range, we call that the equal inside bar . It can be treated as the reversal formation ONLY with additional confirmation. Without an additional trigger, chances will be high that the market will start a sideways movement instead . 2️⃣ - Engulfing candle Once the price reaches some important pivot point quite often it tends to form a weak candle with a long rejection wick (long in comparison to the buddy of the candle). In case if the consequent candle's body engulfs (has a bigger range) the previous candle, we call that the engulfing candle . By itself, it is a quite strong reversal signal and can be applied as a trigger for opening a trading position. 3️⃣ - Engulfing candle (2X) Sometimes, the engulfing candle engulfs not only the previous candle but also one more preceding one . We also can call such a candle a high momentum candle . It is considered to be the strongest reversal formation (among these 3) and can be applied as a signal for a trade entry. ❗️ Remember that candlestick patterns work only on strong pivots/structure levels. Being formed on random levels, the performance of these formations is relatively low. ❤️Please, support this idea with a like and comment!❤️
FOREXCOM:XAUUSDEducation
by VasilyTrader
27
💨𝙀𝙡𝙡𝙞𝙤𝙩𝙩 𝙒𝙖𝙫𝙚 𝙋𝙖𝙩𝙩𝙚𝙧𝙣: 𝙁𝙡𝙖𝙩🌊 ●●● 𝙁𝙡𝙖𝙩 (FL) ❗❗ 𝙂𝙚𝙣𝙚𝙧𝙖𝙡 𝙧𝙪𝙡𝙚𝙨 ● A flat always subdivides into three waves. ● Wave A is always a zigzag, flat or combination . ● Wave B is always a zigzag. ● Wave C is always an impulse or a ending diagonal. ❗ 𝙂𝙚𝙣𝙚𝙧𝙖𝙡 𝙜𝙪𝙞𝙙𝙚𝙡𝙞𝙣𝙚𝙨 ● Wave A is usually a zigzag. ●● 𝙀𝙭𝙥𝙖𝙣𝙙𝙚𝙙 𝙁𝙡𝙖𝙩 (Exp.FL) ❗❗ 𝙍𝙪𝙡𝙚𝙨 ● Wave B always ends after the start of wave A . ● Wave C always ends past the end of wave A . ❗ 𝙂𝙪𝙞𝙙𝙚𝙡𝙞𝙣𝙚𝙨 ● Wave B usually retraces 123.6 or 138.2% of wave A , less often — 161.8% . ● Wave C is often equal to 161.8% of wave A , less often — 261.8% . ● The most common type of flat. ●● 𝙍𝙪𝙣𝙣𝙞𝙣𝙜 𝙛𝙡𝙖𝙩 (Runn.FL) ❗❗ 𝙍𝙪𝙡𝙚𝙨 ● Wave B always ends after the start of wave A . ● Wave C never goes beyond the end of wave A . ❗ 𝙂𝙪𝙞𝙙𝙚𝙡𝙞𝙣𝙚𝙨 ● Within such a flat wave B should end well above the origin of wave A and that means wave C might reflect a 61.8% or even a 100% relationship to wave A . ● A running flat indicates that the forces in the direction of the larger trend at next higher degree are powerful. ● Wave B is usually no more than twice the length of wave A . ● Keep in mind that a running flat is rare. ●● 𝙍𝙚𝙜𝙪𝙡𝙖𝙧 𝙛𝙡𝙖𝙩 (Reg.FL) ❗❗ 𝙍𝙪𝙡𝙚𝙨 ● Wave B never goes beyond beyond the start of wave A . ● Wave B always retraces at least 90 percent of wave A . ● Wave C always ends past the end of wave A . ❗ 𝙂𝙪𝙞𝙙𝙚𝙡𝙞𝙣𝙚𝙨 ● The rarest type of flat. Elliott Wave Principal 2005 & QA EWI .
BITSTAMP:BTCUSDEducation
by TradeWaves-EWA
How To Use Bearish Wolfe Wave SetupThe key to recognizing the Wolfe Wave setups is symmetry. Ideally, waves 1-3-5 are established with very regular timing intervals between moves. The other key ingredient is that the wave 4 should revisit the price range established by waves 1-2 for the best results. Another way to describe the pattern is that it comes as a rising wedge / channel in an uptrend, or falling wedge / channel in a downtrend. Wave 5 is often a false breakout move beyond the bounds of the pattern. Unlike either bull or bear flags, the movement is in the same direction as the overall trend, with the overlapping waves giving signals that an impending reversal is taking shape. This pattern has different names, depending on the source - Larry Pesavento describes the pattern as "3 pushes to a top/bottom" and uses Fibonacci relationships to confirm the setup (waves 3 and 5 are 127% or 162% extensions of the previous pullback.) Jeff Cooper uses "Cooper 1-2-3 swing" nomenclature, and Linda Raschke likes to call this setup "3 Indians". The unique quality about wolfe waves, however, is the objective target projection from waves 1 -> 4
Education
by Anbat
1
Basic Elliott Wave CycleBefore beginning about patterns in concept, we must remember that there are 3 commandments, stated by R.N Elliott that are imperative to theory: (See attached 4 hour GBPCAD chart for example). Impulse Wave 3 can never be the shortest wave Wave 2 can never retrace beyond the start of Wave 1 Wave 4 can never cross into the same price area as Wave 1 These rules, just like all rules in general, are bent sometimes, so don’t be afraid to think outside the box and question everything. What I would suggest is that when one of these 3 rules are broken, then a review needs to be done for the wave count. Wave Sequence: In a Dominant Trend, progress ultimately takes the form of 5 Waves, which are labeled with numbers; 1,2,3,4,5. Three of these swings, which are 1, 3 and 5, affect the overall direction in favor of the Dominant Trend. These Swings are known as Motive Waves or Impulses. Within the 5 Wave Sequence, the 3 Waves that unfold in favor of the Dominant Trend are separated by 2 counter-trend interruptions, which are labeled as 2 and 4. These Swings represent a temporary interruption of the Impulse Waves, hence why they are called Corrective Waves. Wave Principle states that; a Full Cycle is made up of 8 Swings. The Market moves with 5 Waves in the direction of the Main Trend with 3 Waves against it. Once the Impulsive Phase is complete, then the Trend Corrective Legs unfold and act as a pull-back. Labeled A, B & C.
Education
by Anbat
Dow Theory simple introduction For those of you not familiar with Dow Theory. Here's a simple introduction. Nothing technical just a "welcome to" type of educational post. Short History Dow Has 6 Rules - these are known as the 6 Tenets Dow is mostly known (most obvious - the Dow Jones Industrial Average) Other tools and techniques can fit into the Dow Theory, such as Elliott and Wyckoff. Wyckoff "Buy me now" moves. As for Wyckoff - volume is and was a factor for the Dow Theory; Volume should increase in the direction of the trend in order to give confirmation. It is only a secondary indication but Dow realized that if volume didn't increase in the direction of the trend, this is a red flag. This means that the trend may not be valid. As basic wave principles apply - Dow simplified the inner workings of the market with the 6 tenets. He also came out with some brilliant quotes such as "Money is made by conservative trading rather than by the effort to get large profits by taking large risks." And “A person watching the tide coming in and who wishes to know the exact spot which marks the high tide, sets a stick in the sand at the points reached by the incoming waves until the stick reaches a position where the waves do not come up to it, and finally recede enough to show that the tide has turned. This method holds good in watching and determining the flood tide of the stock market.” ====================================================================================================================================== Dow theory trading strategy Most trading strategies used today hinge on one key concept, the "trend". This was a novel idea when Charles H. Dow published his writings at the end of the 19th century. Dow theory says that the market is in an upward trend if one of its averages goes above a previous important high and is accompanied or followed by a similar movement in the other average. Therefore, a Dow theory trading strategy is based on a trend-following strategy, and can either be bullish or bearish. So although the times have changed, human nature and the basic principles have not. Some of the theory can easily be applied to instruments such as commodities, Forex and crypto. As I said, this is not a lesson on the trading with, it was more an intro to. Worth some additional research, there are some very interesting books on the subject. Wyckoff basics part 2 )click the image link) 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.
TVC:DJIEducation
by Mayfair_Ventures
10
ELLIOTT WAVES BASICS - TUTORIALHow to understand ELLIOTT WAVES IN 4 STEPS? For my followers to understand my analysis: The topic is only described very roughly and is intended to give you a first overview of one of my analysis methods. 1. An impulse always moves in five sub-waves. Waves 1, 3 and 5 of these are motive waves that move in the same direction as the overall trend. Waves 2 and 4 are corrective waves, i.e. they correct the previous movement. The following rules apply to an impulse: -Wave 4 must not overlap with wave 1, except in a diagonal. -Wave 3 is never the shortest wave. -Wave 2 must not fall below the starting point of wave 1. If one of these rules is broken, the chart analysis must be revised. 2. A correction wave moves in the opposite direction to the overall trend. Corrective waves are three-part and basically consist of waves A, B and C. Waves A and C are primarily impulse patterns of the corrective movement and drive the market in the opposite direction to the overall trend. Wave B corrects the previous wave A and even has the potential to surpass the starting point of wave A. 3. The standard pattern consists of an impulse wave and a corrective wave. These standard patterns repeat on a short-term basis as well as on a multi-year basis. In other words, every single wave consists of several sub-waves and in turn belongs to the larger picture. For example, wave 1 (an impulse) itself consists of five sub-waves. This standard pattern continues and accordingly always merges into a higher level. 4. Relation Between Fibonacci and Elliott Wave Theory Fibonacci Ratio is useful to measure the target of a wave’s move within an Elliott Wave structure. Different waves in an Elliott Wave structure relates to one another with Fibonacci Ratio. For example, in impulse wave: Wave 2 is typically 38,2 %, 50% or 61.8% of wave 1 • Wave 3 is typically 161.8% of wave 1 • Wave 4 is typically 23.6%, or 38.2% of wave 3 • Wave 5 is typically inverse 1.236 – 1.618% of wave 4, equal to wave 1 or 61.8% of wave 1+3 You can use the information above to determine the point of entry and profit target when entering into a trade.
Education
by TizTrader
6
Wyckoff Anatomy of a Trading RangeRichard Demille Wyckoff (1873–1934) was an early 20th-century pioneer in the technical approach to studying the stock market. He is considered one of the five “titans” of technical analysis, along with Dow, Gann, Elliott and Merrill. Analyses of Trading Ranges One objective of the Wyckoff method is to improve market timing when establishing a position in anticipation of a coming move where a favorable reward/risk ratio exists. Trading ranges (TRs) are places where the previous trend (up or down) has been halted and there is relative equilibrium between supply and demand. Institutions and other large professional interests prepare for their next bull (or bear) campaign as they accumulate (or distribute) shares within the TR. In both accumulation and distribution TRs, the Composite Man is actively buying and selling - the difference being that, in accumulation, the shares purchased outnumber those sold while, in distribution, the opposite is true. The extent of accumulation or distribution determines the cause that unfolds in the subsequent move out of the TR. 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 and 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. Note: Springs or shakeouts usually occur late within a TR and allow the coin or 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 lesser 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 that prior 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.
BITSTAMP:BTCUSDEducation
by TaherJalili
7
EDUCATION - Identifying & Trading Flag PatternsIn this post, we will be explaining what a flag patterns is and how to identify and trade them. What is a Flag? The flag pattern is the most common continuation patterns in technical analysis. It often occurs after a big impulsive move. The impulse move is followed by short bodied candles countertrend to the impulse move, which is called the flag. It is named because of the way it reminds the viewer of a flag on a flagpole. Often, the breakout of the flag is the same size as the impulse leading to the flag. We can use this to create our take profit levels. There are 2 types of ways we can trade flag patterns; Risky Entry & Safe Entry. See below for the pros and cons for both and how to enter them _______________________________________________________________________________ Risk Entry: The reason why it is called a risk entry is because we haven't got many confirmations apart from the bounce off the fibonacci level. Price may have the potential to go lower for a deeper correction before moving up. Whereas for the safe entry, the confirmation that it is a valid flag would be the break of the flag pattern. How to trade using Risk Entry: Wait for price to bounce off the fibonacci levels (0.5 or 0.618) and then enter with stops below/above the correction. One of the advantages of doing a risk entry is that we can have small stop loss and have a great risk:reward ratio. Also, we can gain an entry at the start of the move and HODL! Safe Entry: Safe entry requires more than one confluence and requires confirmation. We have the rejection of the fibonacci level as well as a breakout of the flag, confirming that it is a valid flag pattern. How to trade using Safe Entry: For a safe entry, enter upon the break of the flag pattern with stops above/below the flag depending on whether its a bull or a bear flag. First TP would be the recent structure level and second TP would be the length of the impulse which led up to the correction. The disadvantage to using a safe entry is that we require a bigger stop loss which makes the risk:reward ratio not as great as the risk entry. However, the probability of the trade succeeding is higher. _______________________________________________________________________________ EXAMPLES OF RISK ENTRY EXAMPLES OF SAFE ENTRY
Education
by Altsignals
6