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Wave Analysis

Elliot Waves Complete Guide | Chapter 3.3 - "Running, Contract"Hello Traders. Welcome to Chapter 3.3, where we talk further about a different form of corrective waves, the Flat and Expanded correction. In chapter 3.3 I discuss the last of the types of flat corrections! Here, we will also dissect the contracting triangle, also known as the symmetrical triangle by many traders. Chapter 3 Glossary: 3.1 Zig-Zag Waves 3.2 Flat Correction , Expanded Flat 3.3 Running Flat, Contracting Triangle 3.4 Barrier Triangle, Expanded Triangle 3.5 Double-Three 3.6 Triple-Three ----- Running Flat The is the last type flat correction: the running flat variation. It is the least common one, but has the same 3-3-5 structure. This one is hard to spot because a rising wedge is usually considered bearish for many and the last wave is where you will find the confirmation. For these, you want to trade the breakout. Rules: • Wave B ends above the beginning of wave A • Wave C ends higher than the end of wave A • Usually wave C is the same length as wave A. → This kind of correction happen in really strong and fast markets, especially Bitcoin. The fast and high push of wave B and the short wave C are signs of a strong primary trend. A parallel channel regularly marks the low of wave C, marked by the yellow lines! Contracting Triangle Triangles represent a balance and even pressure of buyers and sellers within the market. They contain five overlapping waves with a 3-3-3-3-3 structure. The contracting triangle represents the most frequently appearing. Rules: • Triangles have 5 Waves: A-B-C-D-E • All of the waves are corrective • Upper line is declining, lower line is rising • Wave E frequently overshoots the trendline and can also be a triangle • Triangles only occur as a Wave 4/B/X/Y • Never as a Wave 2/A ❗Triangles represent a continuation pattern for the dominant trend. Remember, continuation patterns are the main trend!
BITSTAMP:BTCUSDEducation
by XForceGlobal
31
USDJPY With Several Evidences For A Potential Bottom FormationHello traders! Today we will talk about weekly USDJPY chart and we will show you many evidences for a potential bottom formation. Well, for the begining let's talk about wave structures from Elliott Wave perspective. USDJPY is in a downtrend since March, but the wave structure is slow, choppy and overlapped which we see it as a complex corrective W-X-Y decline and we know that once corrections fully unfolds, we can expect a reversal. The next very important evidence is an ending diagonal (wedge) pattern placed in third leg Y. The ending diagonal is a special type of wave that occurs in wave 5 of an impulse, or wave C/Y of a correction. This wave often occurs when the preceding move of the trend has gone too far, too fast and has run out of steam. An ending diagonal pattern is a type of pattern that can occur at the completion of a strong move. It reflects a “calming” of the market sentiment such that price still moves generally in the direction of the larger move, but not strongly enough to produce an impulsive wave. Ending diagonals consist of five waves, labeled 1-2-3-4-5, where each wave subdivides into three legs. Waves 1 and 4 overlap in price, while wave 3 can not be the shortest amongst waves 1, 3 and 5. The reason why they are so interesting is because they are indicating a reversal, usually a strong one. The next interesting evidence is that we are already seeing bounce and recovery with quite big weekly candlestick, completely covered the previous one, called bullish engulfing candlestick formation which also suggests a bullish reversal from the lows. If we also consider current break above strong weekly trendline, then with so many evidences, we can easily confirm a potential bottom and bullish reversal. Trade well! If you like what we do, then please like and share the idea! Disclosure: Please be informed that information we provide is NOT a trading recommendation or investment advice. All of our work is for educational purposes only.
Education
by ew-forecast
1
Elliot Waves Complete Guide | Chapter 3.2 - "Flat-Expanded Flat"Hello Traders. Welcome to Chapter 3.2, where we talk about another form of corrective waves, the Flat and Expanded correction. In chapter 3.2, we will be discussing Zig-Zag waves. This is where most people will get "chopped" up in the market, as these corrections can often cause a lot of small panics within these corrective waves. These corrections more often than not, destroy traders. If you learn even the basics of corrective Elliot Waves, you can use them to your advantage to identify if we are in a fakeout and identify whether you are in a corrective pattern or not. Chapter 3 Glossary: 3.1 Zig-Zag Waves 3.2 Flat Correction , Expanded Flat 3.3 Running Flat, Contracting Flat 3.4 Barrier Triangle, Expanded Triangle 3.5 Double-Three 3.6 Triple-Three ----- Flat Correction The Flat correction is probably the second most common corrective pattern and always has a 3-3-5 structure. This can be a very confusing pattern for many as it's also known to cause a lot of losses for intraday traders - it's AKA a "choppy" market period. As wave A is not five-waved and powerful enough, the retracement of wave B is considered strong. There are rules to this! 📌Rules: • It's a sideways movement - Wave A and Wave B are corrective. • Wave C is impulsive, but does not go much below Wave A. • Most of the time, Waves B/C go some degree above or below of Wave A (just to trick people into believing a breakout occurs, hence, choppy!). • Although it is called the Regular Flat Correction, it is not the most common one and the second most common consolidated corrective pattern. ❗The ABSOLUTE most important thing is to just observe in corrective waves unless you are a true day trader. Otherwise, watch for overall market structure to avoid overtrading in corrections since these are the most trickiest. Once you achieve an overall picture of the structure (about 70% through), you can start considering on entering a position to increase your probabilities and risk of not over trading. Expanded Flat The Expanded Flat is the second most common one under the flat corrections. Confused already? Go back and re-read everything. • Expanded flat is a corrective wave pattern with an extended wave B, which reaches higher than the start of wave A. • Wave B makes a fake breakout above the last high. • Wave C is also extended and goes deeper than wave A. • Structure of the correction is 3-3-5. 📌Rules: • Wave B ends higher than the beginning of wave A • Wave C is considered an impulse or ending diagonal and ends lower than the low of wave A. ❗ Wave B/C over and over again catch traders on the wrong side, as fake breakouts take place just before the market turns. This in turn creates a lot of traders to get destroyed in the market! Trade Safe! Below are the chapters from 1-3.1!
BITSTAMP:BTCUSDEducation
by XForceGlobal
29
How to trade the major bearish trendline?How to trade the major bearish trendline? The major bearish trendline consists of three corrective waves according to the Elliott wave principle. The three major corrective waves are labeled as Leg A, Leg B, and Leg C. The common characteristics of Leg A Leg A will form a top formation like a double top, a head and shoulder top pattern, or a triple top pattern. The common characteristics of Leg B The security price will trade in a narrow range during Leg B. Traders will accumulate the security at a low price and sell the security when the price reaches the previous major resistance price. The common characteristics of Leg C The price of the security will drop to a new low price, or the security will drop to the previous major support, or drop to the major bearish trendline. The major bearish trendline is an important line to draw. A trader should extend the major bearish trendline into the future. Which side should a trader trade when a trader recognizes this is a bearish trendline formation trade? A trader can improve his or her profitability by going with the trend. With a bearish trendline formation, a trader should be bearish. A trader should go short when the situation is right to go short. A trader should avoid going against the bearish trendline pattern because a trader doesn't want to be trap in a long position when the price starts falling more. Traders with a current long position need to make a tough decision to liquidate their position to avoid further price drop and further losses. "Do not go in the opposite direction of the freeway!" Therefore, do not trade in the opposite direction of the trend! Thank you for reading! Greenfield Remember to click "Like" and "Follow!" Disclosure: Article written by Greenfield. A market idea by Greenfield Analysis LLC for educational material only.
BITSTAMP:BTCUSDEducation
by GreenfieldAnalysis
1
How to trade a throwback and a pullback?How to trade a throwback and a pullback? What are a throwback and a pullback? A throwback hits a new high price, but will quickly reverse and return to the initial price prior to the breakout. A pullback hits the previous major support, and will quickly resume the uptrend. How to trade a throwback? What are some of the reasons one may fail to trade a throwback? Go long when the price breakout higher, and go short when the price start reverses direction. One may fail to trade a throwback possibly due to failing to differentiate a throwback from a potential new bull run. Also, possibly the trader correctly identified the pattern, but the trend reversed suddenly and trapped the trader. How to trade a pullback? What are some of the reasons one may fail to trade a pullback? Go short when the price breakout lower, and go long when the price starts going higher. One may fail to trade a pullback possibly due to failing to differentiate a pullback from a trend reversal. Also, possibly the trader correctly identified the pattern, but the trend reversed suddenly and trapped the trader. Thank you for reading! Greenfield Remember to click "Like" and "Follow!" Disclosure: Article written by Greenfield. A market idea by Greenfield Analysis LLC for educational material only.
NYSE:NIOEducation
by GreenfieldAnalysis
Examples of trading with Fibonacci reversal retracement levels Using Fibonacci Reversal Retracement levels, you need to keep in mind some of the following: 1) Major trend direction off of 4 hour and/or daily charts, especially if you day trade or scalp off of 15 minute and/or lower time frames. 2) Fib Ret major levels: 38%, 50% and 61.8% (you can add other levels and extensions for exit targets, if you wish) 3) What session and price will determine liquidity and volume of any micro trends of a major trend direction 4) Trading Forex is all about probabilities or percentages of certain setups on certain time frames working out of 100 exact same trades. I like 70% or higher. Two noted chart possible bullish trades off of the 15 minute time frame of GBPAUD pair on Friday were great setups due to 1st trade being 1:4 risk/reward or 12.5 stop loss and 50 pip reward/profit potential and 2nd trade was 1:2 risk/reward or 12.5 stop loss and 25 pip reward/profit potential. You need to have an trading edge in your plan and trade your plan. Plan should be automatic or robotic, if blank happens you do blank, no emotions. Like all lagging indicators, they should verify or dis-verify what price action is doing, fib reversal ret levels, support and resistance - indicators should never be the only reason why you entry a new trade. More positive confluences you have before you take a new trade will give you greater success in long run. I use pivot points, BB indicator and support and resistance lines on my charts, when trading. Add trends, fib ret and price zone levels when needed. Wish you good luck Forex trading and keep charts and trading as simple as you can, because more stuff on charts equals more distractions from actually trading.
Education
by Anbat
1
The Laws of Supply and Demand Affects the Price MovementThe Laws of Supply and Demand Affects the Price Movement 1. When supply exceeds demand, the price is more likely to fall. 2. As the price is falling, supply will increase, and demand will decrease. As a result, the price will fall faster. 3. At valleys, demand is greater than supply; therefore, the price is more likely to increase. 4. At peaks, supply is greater than demand; therefore, price is more likely to fall. 5. As the price trends higher, demand is greater than supply; therefore, price is more likely to go higher. Thank you for reading! Greenfield Remember to click "Like" and "Follow!" Disclosure: Article written by Greenfield. A market idea by Greenfield Analysis LLC for educational material only.
NYSE:BACEducation
by GreenfieldAnalysis
What is a price gap? How to trade the price gap?What is a price gap? A price gap appears on the price chart as a blank space, and the blank space represents the time when there was no trading activity in that particular price level. 4 Types of Price Gaps 1. A breakaway gap happens when the security traded in a narrow range for some time, and then the security jumps to a different price level. This indicates interest in the security to test a different price level. 2. A common gap happens because of traders daily buying and selling activity. 3. A continuation gap is a measuring gap to determine if the current trend will continue. 4. An exhaustion gap is a gap that happens toward the end of a trending period. This can be a sign of a price reversal is about to happen. How to trade the price gap? Traders should trade in the direction of the breakaway gap and continuation gap. Traders should consider carefully before adding to their current position when they encounter an exhaustion price gap. What are some of the reasons one may fail to trade the price gap? Possibly due to misinterpreting the exhaustion gap as a continuation gap, and possibly misinterpreting the bull or bear trap as a breakout gap. Possibly it was initially a continuation gap or a breakout gap correctly identified, but suddenly the trend changed direction and trapped the traders. Thank you for reading! Greenfield Remember to click "Like" and "Follow!" Disclosure: Chart interpreted and article prepared by Greenfield. A market idea by Greenfield Analysis LLC for educational material only.
NASDAQ:TSLAEducation
by GreenfieldAnalysis
16
Volatility Measurement: Average True Range Hello, dear subscribers! The market volatility measurement is a very important for the trading strategies constructing. One of the most appropriate and effective way to do it is to use the Average True Range (ATR) indicator. How to calculate ATR? First of all we should receive True Range value and calculate it's moving average on 14 periods. The True Range is a maximum of three values: 1. High - Low 2. Absolute value of (High - Previous candle close) 3. Absolute value of (Low - Previous candle close) Thus, this indicator takes into account not only the current candle prices, also for the previous candle. How to use it? This indicator can't help to define the future price action direction but it can be very useful in combination with other indicators. The most appropriate way is to combine it with any oscillator. The oscillator will help you to identify the overbought and oversold conditions or bullish/bearish divergences, as a result you can define the direction of potential price move. The ATR will define the best entry point when the price on the minimum/maximum level. ATR is greatly triggered on huge pumps and dumps, as you can see on the chart after that price usually has a correction which can be used in your trades. DISCLAMER: Information is provided only for educational purposes. Do your own study before taking any actions or decisions.
BITSTAMP:BTCUSDEducation
by Skyrexio
HOW-TO Catch the Elliott Wave 3 swingIn this help Tutorial, we take a look at using the MTPredictor Advanced trade setups script to catch the Elliott Wave 3 swing. To catch the Elliott Wave 3 swing, we need to be able to identify the end of the Wave 2 swing. In Elliott Wave Terms, the Wave 2 is the initial correction after the initial swing off an important high or low . The Wave 2 also normally sub divides into a minor 3 swing (abc) pattern. In MTPredictor we use our isolation approach to Elliott Wave Analysis, because we believe that markets are random about 50% of the time, so we only look to use Elliott Wave when the patterns are clear. And for this we look to start our Elliott Wave sequence at higher time frame Decision Pont (DP) support or resistance. We then look for the initial move from this important high or low. After that we then look for the initial correction, to the initial move, that subdivides into a minor 3 swing, abc pattern. This is then the end of the Elliott Wave 2, and as such is a good place to look to enter a new Trade. We then look for a Wave 3 swing to unfold. As a Profit target for this swing we use our MTPredictor WPT (Wave Price Target) zones, which are Fib Clusters, of where the Wave 3 is most likely to end. Please remember that losses can and will always unfold, that is why we suggest using Position Sizing to enter the Trade, this keeps the inevitable losses (there will be losses with any trading approach) small at just -1R. Because the Wave 3 swing is usually the strongest and longest in a completed 5 wave sequence the Profit at the Typical Wave 3 WPT zone is usually large, not in just $’s but (more importantly) in Risk/Reward units. I hope this Tutorial has helped show our approach and what to look for to uncover the end of the Elliott Wave 2 swing, to then be able to capture the Elliott Wave 3 swing. Please note: this is not a trade recommendation, you should all perform your own Analysis. Losses can and will unfold when Trading, please always use Stops and keep your losses small.
Education
by MTPredictor
Elliott -Wyckoff Breakdown (2) of (2)Although it's a crazy time with the whole world in Pandemic mode due to Covid - you can still see the Wyckoff theory at work, by looking at these principles near or in key levels you can see the advantage of waiting to join smart money moves. As a mentor, I often get emails and messages asking should I long this or short that. And usually, as soon as you see the chart, it's obvious that the retail game is being played. And we wonder why over 70% of retail traders lose money. Looking for confluence and then trading with confidence into or from key zones makes more sense than trading support and resistance levels which have been open to a subjective view. Chat rooms, trade ideas, signals, indicators - all move the trader away from the real structural significance. Again like Elliott - there are plenty of educational videos, PDFs, and books on Wyckoff and his theory. Some good books include "How I trade and invest in stocks and bonds" by Richard D Wyckoff and another good Wyckoff book is "The Wyckoff methodology in-depth" by Ruben Villahermosa Chaves. 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.
Education
by Mayfair_Ventures
Elliott - Wyckoff Breakdown (1) of (2)After spending now 21 years trading, It's clear to see that a lot of the old ways work just as well as when I was first introduced to trading. There's a reason names like Wyckoff & Elliott are still popular terminology in the trading communities. Even Fibonacci now centuries old. I wanted to share a quick top-down breakdown of the market setup using simple but effective tools. Starting off - I have software called Advanced Get - this paints the Elliott wave patterns on the chart. There are plenty of tutorials available on the exact workings of Elliott wave theory. This is not the point here, it's just to illustrate the concept of how to use them in confluence. There are also some great books out there that go into a lot of detail such as Profits in the stock market and How to Identify High-Profit Elliott Wave trades in Real Time. Once you have identified the wave levels (even the current wave) you can measure using Fibonacci retracements & extension tools to get areas of interest as I like to call them. (You often find these to also fall into categories of supply/demand and order block levels, imbalance. So they act like a magnet pulling the price. Bear in mind the two charts above are monthly and weekly. After identifying major trends on the monthly and stepping down to a weekly view - you can now focus on finding these key levels before dropping to the daily. At this point - personally, I look at how close the move is to the weekly levels and then look at COT along with sentiment data to get a feel for the "great professional" - strong hands and compare it to the weak hands, being retail sentiment. It is no secret that on most broker platforms over 70% (being generous) of retail traders lose money. Smart money is playing the game and throwing the crumbs. What you might see is one of a few likely scenarios' ;- 1) COT data shows more longs than shorts (assume this NZDUSD example) - which means the move to level 3 wave is more probable. 2) Sentiment shows retail thinking the trend is exhausted and already for the drop at the time of writing 62% of IG sentiment is short. other info could show that some net long positions have been closed (1) meaning the drop is coming and the wave 3-4 pullback on the weekly is about to take place. looking at key levels, it's clear to see the (3) high on the weekly is in confluence with a major supply zone. I will post part two of this idea later today. 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.
Education
by Mayfair_Ventures
Margin Short Like a Professional Using Phoenix - Part 2Hi Everyone! This is ONLY a BRIEF example how we would use Phoenix to perform a BRIEF short with low leverage DURING a period of UPWARD pressure. If you are emotionally attached to the amount you are betting in your margin short position, you are betting too much! Why? It will be hard to FOCUS on Phoenix and TRUST your analysis; which can result in bad decisions inspired by emotions. If using cross leverage, make certain you have a stop loss in place. I prefer standard leverage with an amount I'm comfortable losing if my analysis is wrong and my position (amount of bet with standard leverage) is liquidated. KNOW your trend: If you see upward pressure in higher group of time frames, you know the amount of time your short position will be OPEN will LIKELY be for a short period of time. Maybe you are better off waiting for the dip to complete and reverse to upward pressure to open a margin long position instead. If your trend in higher group of time frames is upward pressure while considering a short position, make sure to use very low leverage (2x, 3x or no more than 5x). I prefer 3x If your trend appears as though it's on the verge of a reversal to sustained downward pressure, you can consider 5x to 10x leverage. However, I would want to see CONFIRMATION. Such as the White Energy in the 3-Day time frame has CLOSED below level 50. When the Red RSI is approaching level 50 in a higher time frame (3h in my scenario) than the lower time frames I used to open the position (23min. 45min. and 90min.), we know the Red RSI falling below level 50 will TRIGGER a race of downward pressure. The race would be the White Energy in the 3h against the Red RSI in the 6h. HOWEVER, do NOT be distracted by that race. You know your short position will be open only for a short period of time (in my scenario). You will watch the scalping group of time frames to determine when you will close your short position and avoid being tempted by greed to keep your short position open longer. More tips later at another time in the future.
BITSTAMP:BTCUSDEducation
by WyckoffMode
37
Elliot Waves Complete Guide | Chapter 3.1 - "Corrective Waves"Hello Traders. Welcome to Chapter 3, where we talk about corrective waves. In chapter 3.1, we will be discussing Zig-Zag waves. The zig zag wave is one of the common of patterns in corrective Elliot Waves. Many of us see this on a daily basis, but did you know that there was a meaning behind all of the fluctuations in the price action? Chapter 3 Glossary: 3.1 Zig-Zag Waves 3.2 Flat Correction, Expanded Flat 3.3 Running Flat, Contracting Flat 3.4 Barrier Triangle, Expanded Triangle 3.5 Double-Three 3.6 Triple-Three ----- We have to understand that markets also move against the trend of one greater degree only with struggle due to intraday traders. This is why Elliot Waves is another technique to organize the chaos within the market, as two forces are pulling in each direction regardless of how we want it to move. Let's talk about the MAIN important note for correction waves - they never have five waves. If they do, they are only a motive part of the overall corrective pattern. It's that simple. Corrections can be classified into two different classes of styles. There are the sharp corrections, which move sharply against the major trend. Their angle is rather steep. On the other hand are sideways corrections, they don’t retrace much in price, but can take a long time to finish. Apart from the two styles are in general three correction pattern: • Zig-Zag (5-3-5) • Flat (3-3-5) (regular, expanded, running) • Triangle (3-3-3-3-3) (contracting, barrier, expanding and running) Combination of these pattern form either a double three or triple three correction. These prolonged corrections are separated by a wave X. All of these will be discussed in the following chapters. Zig-Zag Patterns A single Zig-Zag is a simple three-waved corrective movement which is labelled as an ABC wave. It’s structure is 5-3-5, and the top of wave B is noticeably lower than the start of wave A as shown above. There are rules to this. If you are still not sure of what we are talking about, you need to go back and review chapter 2. Rules: • Wave A has to be a motive or diagonal • Wave B can only be a corrective pattern • Wave B has to be shorter than Wave A • Wave C has to be an impulse or ending diagonal along the way This is the most common corrective pattern in Elliott Wave Theory and is usually a sharp correction within a descending wedge structure. For those not able to see it from an Elliot wave perspective, most traders can identify this pattern as a pennant continuation pattern. But the chaotic movements inside can be organized via Elliot Waves. The length of wave C is between 100%-161.8% of wave A. Zig-Zag corrections appear most of the time as a wave 2 only, but are also very common as a connective wave in more complex corrections like a double as shown above! Occasionally Zig-Zag corrections will occur in two, sometimes even three times in a row. This happens usually when the first Zig-Zag does not correct far enough from a price action perspective. ❗If a double Zig-Zag occurs, the single ZigZags are separated by a three-waved reactionary move, which is labelled as Wave X and is always corrective on the way down. Note: Zig-Zag corrections often fit into a parallel channel! It is drawn between the highs of wave A & B to determine the end of wave C. Thank you! Trade Safe.
Editors' picks
BITSTAMP:BTCUSDEducation
by XForceGlobal
60
Elliott wave : corrective wave How to use fibonacci retracement and extension this entire trend was started at 1857 and ends at 1900 with wxy zigzag corrective wave. wave x is subdivide into abc flat correction which retraced upto 0.382 of wave X at 1870 wave y made 1.382 projection of wave w at 1900. the entire wxy trend made 50% retracement at 1878. (retracement after wave y overlap wave x high which made clear that these are corrective wave not the impulsive wave ) how to trade ? buy at 0.383 retracement of wave X and exit at 1.382 projection sell at 1.382 projection at 1900 and exit at 0.50 retracement
FOREXCOM:XAUUSDEducation
by Sangam-Agarwal
4