SPY Fibonacci Price Theory And BreakOut BarsThis instructional video teaches you the basics of Fibonacci Price Theory in conjunction with Breakout Bars and how price is the ultimate indicator.
Throughout this video, I try to provide instruction on key elements related to the Fibonacci Price Theory (Unique & Standout Highs/Lows). Additionally, I've also included Breakout Bars and Fibonacci Price Retracement concepts.
What I really hope you learn from this video is to see price as the true ultimate indicator for your trading decisions. Using technical analysis techniques is fine, but use price as the key element when trying to confirm or reject your trading ideas.
I hope this helps you understand that price, action, and reaction through trends, peaks, and troughs are the most important components of the chart. Everything else is peripheral.
Wave Analysis
Bitcoin: How to Forecast the End of a Trend.The advance from Dec 2018 seems to be tracing an impulse pattern. Wave 1 is an impulse, wave 2 is a zigzag which neatly predicts flat wave 4 by guideline of alternation.
The fifth wave appears to be tracing an impulse as well; an extension. It's probable that two minute degrees have reached completion at this stage and the market appears to be tracing out the third wave.
So how do you forecast the target for wave 5?
One way is to use an Elliott wave channel. Connect the end of wave 2 and 4. Draw a parallel line along the top of wave 3 to project wave 5 target. It is quite common for wave 5 to end upon reaching the upper boundary line of the channel
In some cases, when wave 3 is uncommonly strong, almost vertical. Draw a parallel line using the top of wave 1 instead of wave 3.
From experience, it's quite advantageous to draw the two upper boundary lines.
An idea for you tradesHello Everyone
I want to say something that might be your strategy or you may criticize me about that but I am sure whoever disagrees with me about it is struggling to get profit in his account.
Note: Always and always trade in a chart that is in a weekly trend.
I man it does not matter what timeframe you are trading and with what method, it is incredibly vital that chose a trend (Bullish for long positions and Bearish for short positions) and never and ever try to trap yourself in a chart that is ranging in WEKLY TIMEFRAME. There are many reasons for that and I have paid a lot of money to learn it.
The first reason is a lot of support/resistance level existing in this area that try to hit your Stops.
Second reason is that we should follow the wales in every market and big whales do not waste their time and money for trading in this long term consolidations.
Oil is a good example for now and I just want to say, these symbols are not ours and we should chose more profitable ones.
This is the most reason that all charts do not move together and liquidity shifts between them.
Thanks
How to Confirm an Elliott Wave Count.Hello fellow traders, today I would like to show you how to apply a Kennedy Channeling technique (by Jeffrey Kennedy) to identify and confirm Elliott waves with more confidence.
1. Base Channel:- Wave 3 identification
When wave 2 is complete, connect the origin of wave 1 and the end of wave 2. Draw a parallel line along the top of wave 1. As long as price action stays within this channel, you can consider price action corrective, probably wave C of a Zigzag. In a bullish trend, prices ought to break above the upper boundary line of this channel for wave 3 count to be acceptable.
2. Acceleration Channel:-Wave 4 identification.
Connect the extreme of wave 1 and the top of wave 3. Draw a parallel line starting at the bottom of wave 2. Only after prices break through the lower boundary line of the acceleration channel, could you be convinced that wave 3 is over and wave 4 is unfolding.
3. Final Channel:- Wave 5 identification
Connect the end of waves 2 and 4. Draw a parallel line along the top of wave 3 to project wave 5 target. It is quite common for wave 5 to terminate upon reaching the upper trendline of the final channel.
That's all for today. Trade wisely!
Want to spot a turning point in trend before it happens?Want to spot a turning point in trend before it happens? Use Elliott wave parallel channel
This chart shows the GBP/JPY currency pair using monthly candlesticks. The advance from Sep 2011 to June 2015 can be labeled as an impulse wave (A). From that high, the pair declined in three waves labeled as wave (B) of a Zigzag A-B-C correction with an expanding diagonal characteristic in the C wave position.
As a rule, in a Zigzag rally, wave B notably terminates above the origin of wave A. When wave (C) advance of a zigzag rally is in operation, we can forecast where wave (C) might end.
We can use Elliott wave channel projection by connecting the origin of wave (A) with the end of wave (B) and then drawing a parallel line from the end of wave (A). As a guideline, the resulting channel gives us a potential target for the wave (C) endpoint.
Moreover, we can also use ratio analysis to improve the odds. As a guideline, in Zigzag formations, wave (C) commonly ends after traveling the same length as wave (A). Observe this level corresponds with the Elliott wave channel projection.
This cluster of evidence hints at wave (C) advance from Mar 2020 is in late stages and that prices are approaching a major top.
5-Year SPX500 Expectations - Greatest Opportunity Of Your LifeWould you believe me if I told you the US & global markets (some) will rally more than 65% to 125% (or more) over the next 4 to 5+ years?
You would probably call me crazy for even suggesting that will happen in a reasonably short time frame.
But, what if I could show you how structurally (using Elliot Wave concepts and Fibonacci) this incredible rally may already be baked into the markets?
What if I could show you that, barring any major economic destruction event, the US Fed and Global Central banks may have unleashed the inflation beast - which could lead to massive Hyperinflation over the next 5+ years?
Would you be prepared for it? Would you even believe me if I could show you evidence that it may happen much quicker than you can imagine?
And would you believe me if I told you Gold/Silver will rally more than 500% over the next 5+ years while attempting to hedge global debt/inflation risks?
Now is the time to prepare for the greatest opportunity of your life. You must understand the structural mechanics of price related to the current global market dynamics.
Please boost and share this video with your friends. Everyone needs to be aware of what is likely to happen over the next 5+ years so they can prepare for and profit from these exceptional price trends.
Predicting Bitcoin's Cycle Using the Elliott Wave TheoryGreetings, fellow traders. In this article, we'll be reassessing our annual Elliott Wave counts and going deeper into interpreting Bitcoin's current decade cycle. I'll make sure to segment each part by drawing insights from the previous cycles, also employing the Elliott Wave Theory, and integrating major timeline events to bolster my perspective on Bitcoin's potential trajectory in the upcoming cycle. The wave theory will help neutralize many of the irrational thoughts that other analysts may have that just show straight arrows to the upside. This thesis helps you get a better understanding of where pullbacks and areas of high strength (wave 3 impulses) may occur. Remember, the wave theory will never be perfect in painting the picture, but it will help you be positioned as best as possible with proper invalidation levels.
One of the most significant phenomena witnessed in the current financial market landscape is Bitcoin's adherence to a notably algorithmic parabolic trend, where cycles persist in a compounded manner in terms of percentages. This raises the crucial question: "Can we expect all past cycles to mirror the current one?" Answering this is very challenging. However, Bitcoin has one of the strongest strengths against all other coins, which is price history. Fundamentals attached, Bitcoin has been extremely resilient against major events (with wild swings), but the overall trend has remained in tact for over a decade. This indicates not only strength, but true adoption.
We must discern whether the price action will evolve into something new or continue the pattern of echoing past cycles (fractals). The most effective method for interpreting Bitcoin's price movements is through the logarithmic chart that is presented in the chart above.
When examining past cycles through the lens of only fractals (as that is how it has been for the past decade), the most effective approach to understanding the present cycle is by conceptualizing it as a sequence of nested '1-2' counts. In simpler terms, experiencing a succession of 1-2/1-2/1-2 patterns might lead to either optimistic expectations or impending disappointment. This ambiguity prompts consideration of an alternative bearish perspective, elaborated upon subsequently. Keep in mind, there's always room for firsts, meaning that the failure of the fractal pattern is always a possibility. Again, this idea is further explained in the bearish alternative explanation below.
Bearish Alternative:
For a more rational approach, the Elliott Wave Theory also suggests alternative pathways. One narrowed down scenario would be that the cycle has now matured, suggesting for a more maturing market with more complexity in corrective types (patterns).
The logarithmic chart may indicate a deceleration in the macro timeframe, suggesting that Bitcoin is currently in a maturity phase. Its role as a store of value to say the least. To simply put, the corrections will be far more controlled as investors create larger distribution patterns through the timeline and create demand/sell zones. Price maturity, a concept commonly observed in stock models, implies that markets do not move linearly and eventually reach an endpoint, including in price action. Utilizing the Elliott Wave Theory, we can generate one alternative count that shows the whole cycle is now possibly in a larger 1-2 of some sort:
1. The fact that we have a possible WXYXZ corrective pattern for the 2021-2023 bear market, this may indicate this is part of something larger. Usually, you will see wave 2's have a simple ABC/WXY type patterns.
2. This speculation can then lead us to believe that we could be part of a larger corrective pattern, most likely as a flat pattern now.
3. Consequently, this insight aids in forecasting that we are entering into the new phase of 'market maturity,' or what I like to term as the "flattening of the curve theory."
We could debate endlessly about the next bear market for Bitcoin, but the undeniable truth is that over the past 15 years, the market has proven its resilience against political turmoil, hacking attempts, and regulatory crackdowns.
It's remarkable to realize that aside from halvings, forks, and institutional adoption, there haven't been any significant bullish events/catalysts. This speaks volumes about Bitcoin's strength. There wasn't any single groundbreaking moment or major catalyst for each bull run. Instead, it was a series of interconnected events that sustained that momentum, leaving it to us as investors to identify distribution points.
Explaining Dow Theory - Does it Deliver Results?
Dow theory stands out as one of the most revered theories in the history of financial markets. Whether you're engaged in intraday trading, short-term trading, or long-term investment, understanding this theory is bound to help you formulate diverse strategies.
Originally crafted by Charles Dow in the late 1800s, Dow Theory, also known as Dow Jones Theory, has stood the test of time. Charles Dow, the founder of the Dow-Jones financial news service WSJ (Wall Street Journal) and Dow Jones and Company, developed this trading strategy.
Even after a century, Dow theory remains influential and is considered one of the most sophisticated studies in technical analysis.
I trust this will be beneficial to anyone involved in trading or investing in financial markets.
What is the essence of Dow Theory?
In an article published in the Wall Street Journal on January 31, 1901, Charles H. Dow likened the stock market to the ebb and flow of ocean tides.
He stated, "A person observing the rising tide and wishing to determine the precise moment of high tide places a stick in the sand at the points reached by the incoming waves until the stick reaches a position where the waves no longer reach it and eventually recede enough to indicate that the tide has turned." This approach proves effective in monitoring and predicting the rising tide of the stock market.
Dow believed that analyzing the current state of the stock market could offer insights into the current state of the economy.
Indeed, the stock market can serve as a valuable gauge for understanding the underlying reasons behind upward and downward trends in both the economy and individual stocks.
How Does the Dow Theory Operate?
The Dow Theory operates based on several principles, which include the following:
1. The Averages Account for Everything:
Market prices incorporate all known or unknown factors that may impact supply and demand. It is believed that the market reflects all available information, including information not yet public. This encompasses various events such as natural disasters like droughts, cyclones, floods, or earthquakes.
Major geopolitical occurrences, trade conflicts, domestic policies, elections, GDP growth, fluctuations in interest rates, and earnings forecasts or anticipations are all already factored into market prices. While unforeseen events may arise, they typically influence short-term trends while leaving the primary trend intact.
2.The Market Exhibits Three Trends:
a)The primary trend:
This trend can extend from one year to several years and represents the dominant movement of the market. It is commonly known as either a bull or bear market. The bullish primary uptrend sees higher highs followed by higher lows, while the bearish primary downtrend witnesses lower highs and lows.
The challenge lies in predicting when and where these primary trends will conclude. The goal of Dow Theory is to leverage known information rather than making speculative guesses about the unknown. By adhering to Dow Theory guidelines, one can identify and align with the primary trend.
b)The intermediate trend or secondary trend:
This trend typically lasts from 3 weeks to several months and is characterized by reactionary movements. In a bull market, these movements are viewed as corrections, whereas in a bear market, they are seen as rally attempts.
For instance, during a primary uptrend, a stock may retrace from its high to establish a low (known as an intermediate trend or correction). Conversely, in a primary downtrend, a stock might experience a temporary rebound after a prolonged decline (known as bear market rallies).
c)The minor trend or daily fluctuations:
This trend, lasting from several days to a few hours, is the least reliable and is often disregarded according to Dow Theory. Long-term investors should perceive daily fluctuations as part of the corrective process within intermediate trends or bear market rallies.
These fluctuations represent the noise in the market and can be susceptible to manipulation. While daily price action is important, its significance lies in the context of the broader market structure.
Analyzing daily price movements over several days or weeks can provide valuable insights when viewed alongside the larger market picture. While individual pieces of the structure may seem insignificant, they are integral to completing the overall picture.
3.Major Trends Comprise Three Phases:
Dow focused extensively on major trends, identifying three distinct phases within them: Accumulation, Public participation, and Distribution.
These phases occur cyclically and repeat over time.
a) Accumulation Phase:
This phase occurs when the market is in a bearish trend, characterized by negative sentiments and a lack of hope for an upcoming uptrend. For instance, we witnessed steep declines in mid-cap stocks in the Indian share market, with new lows being made frequently.
While many investors anticipate this trend to persist indefinitely, this is actually when significant investors, such as large fund houses and institutional investors, begin gradually accumulating these stocks.
This period is known as "smart money" investing for the long term. Despite ongoing selling pressure in the market, buyers are readily found.
b) Public Participation Phase:
During this phase, the market has already absorbed the negativity, with "smart money" investing. This marks the second stage of a primary bull market and typically sees the most significant rise in prices.
At this point, the majority of the public (retail investors) also considers joining in as prices rapidly increase. However, many are left behind due to the speed of the rallies and the upward trend in averages.
Traders and investors may experience regret for not participating in the rally. This phase follows improved business conditions and increased stock valuations.
c) Distribution Phase:
The third stage represents excess, eventually transitioning into the distribution phase. In this final stage, the public (retail investors) becomes fully engaged in the market, captivated by the bull market rally.
Some investors who previously felt left out may still seek opportunities to join the rally based on valuations.
However, this is when "smart money" begins to sell off shares at every high point. Meanwhile, the public attempts to buy at these levels, absorbing the selling volumes from large investors.
In the distribution phase, whenever prices attempt to rise, "smart money" unloads their holdings.
This marks the onset of a bear market, where sentiments turn negative, bankruptcy filings increase, and economic growth shifts.
During a bear market, frustration levels rise among retail investors as hope dwindles.
4.Confirmation Between Averages is Essential:
Dow used to say that unless both Industrial and Rail(transportation) Averages exceed a previous peak, there is no confirmation or continuation of a bull market.
Both the averages did not have to move simultaneously, but the quicker one followed another – the stronger the confirmation.
To put it differently, observe the image above, as you can see both the averages are in bull market, trending upward from Point A to C.
5.Confirmation of Trends Through Volume:
Volume serves as a metric indicating the amount of shares traded within a specific timeframe, aiding in trend and pattern analysis.
According to Dow theory, a stock's uptrend should be supported by high volume and exhibit low volume during corrections.
While volume data alone may not be comprehensive, integrating it with resistance and support levels can provide a more comprehensive understanding.
6.Trend Persistence Until Clear Reversal Signals:
Similar to Newton's first law of motion, which states that an object will remain at rest or in uniform motion unless acted upon by an external force, market trends are expected to persist until a significant external force, such as changes in business conditions, prompts a reversal.
Signs of trend reversals become apparent when impending changes in trend direction are observed.
7.Signal Recognition and Trend Identification:
A significant challenge in implementing the Dow theory is accurately identifying trend reversals. Adhering to the Dow theory requires not only assessing the overall market direction but also recognizing definitive signals of trend reversals.
A key technique employed in identifying trend reversals within the Dow theory is analyzing peaks and troughs, or highs and lows. Peaks represent the highest points in a market movement, while troughs signify the lowest points.
According to the Dow theory, markets do not move in a linear fashion but rather oscillate between highs (peaks) and lows (troughs), with overall market movements trending in a particular direction.
An upward trend in Dow theory consists of a series of progressively higher peaks and troughs, while a downward trend is characterized by progressively lower peaks and troughs.
8.Market Manipulation:
Charles Dow believed that manipulation of the primary trend was improbable, while short-term trading, including intraday movements and secondary movements, could be susceptible to manipulation.
Short-term movements, ranging from hours to weeks, may be influenced by factors such as large institutions, speculators, breaking news, or rumors, potentially leading to manipulation.
While individual securities may be manipulated, such as artificially driving up prices before reverting to the primary trend, manipulating the entire market is highly unlikely due to its vast size.
Why Dow Theory Is Not Foolproof:
Dow Theory is not a fail-safe method for outperforming the market, as it is not without its flaws. Critics argue that it lacks the depth and precision of a formal theory.
Conclusion:
Understanding the Dow Theory enables traders to identify hidden trends that may elude more seasoned investors, empowering them to make informed decisions about their positions.
The Dow theory aims to pinpoint the primary trend and capitalize on significant movements. Given the market's susceptibility to emotion and tendency for overreaction, the goal is to focus on identifying and following the prevailing trend.
The wave principle is a high-probability forecasting toolHello, dear friend!
As a fan of the Elliott Wave Principle, I have dedicated the past three years to studying, gaining experience, and improving my skills as an analyst and trader. Although the journey has been and continues to be challenging, it has been remarkably rewarding.
My goal is to share personal insights and experiences and provide valuable perspectives on the financial markets. I believe that success in this profession requires a disciplined approach, effort, perseverance, and patience, along with constant practice. By adopting this method, one can potentially become a skilled analyst.
The Elliott Wave Principle serves as a powerful tool for performing real-time chart analysis and market guidance based on specific rules and guidelines. With this knowledge, a strong trading strategy can be developed, and informed decisions can be made.
My dear friend, I will be with you on this path, and together we will navigate the peaks and valleys of the successful financial markets.
The aforementioned analytical concept was implemented on September 28, 2023.
Sincerely (Mr. Nobody)
Random Walk? I Would Rather Have Directions
Too many traders think they are taking a Random Walk through these market streets.
Well this post is to help them define a direction.
Can you use this to target the exact price and day/hour/min? No (well sometimes you can nail it)
But just like the Map App on your phone it will get you within a certain degree of accuracy AND you will definitely generally no where you are in relationship to where you want to be
More to come!!!
Using Fibonacci & FPT To Identify Trends/Entries/ReversalsLearn how powerful Fibonacci Retracements and Fibonacci Price Theory are when adequately deployed.
It can tell where and when to target entries, trends, risks, and reversals.
Anyone can do this when they learn to efficiently manage the ranges and use Fibonacci tools in Trading View.
It's time you took a few minutes to learn the PRICE is the ultimate indicator. You don't need to use dozens of other indicators (unless you want to add to the core Fibonacci techniques).
Watch this video, then follow my research/videos.
investing is better than tradingIn this video, I highlight how to use an investor's approach in the financial markets in two ways.
The first way is through what I call the "Thomas Wood" Way of entering positions that side with the market trend after price breaks out of a correction that suggests continuation of the trend.
The second way is the way I learnt to see the market movement between buyers and sellers, demand and supply - also following the trend of the market.
Trading every move that the markets present to you is deadly as it can lead to confusion, losses and tiring your self mentally and emotionally, whereas only looking for opportunities that show or suggest that the market is continuing its original flow is easier and results in more progress.
A word of caution though, is that you have to be patient when using this approach (P2+BU) as it does take time to go into effect.
Trading is execution - USD/JPY Live trading exampleThis is a short mentoring/educational session.
The USD/JPY is the pair we are trading this evening, I analyse this based on the mtf wave structure.
I explained the importance of the secondary trend, as a determinant tool or information for what may happen in the future.
I also shared one of my waves of success strategy using the DMI and the VMP for trade execution.
Finally, after taking the trade, I explained late Mark Douglas probabilistic principles which acts as a solid foundation of our behaviour and interaction with the market.
📍Part #1, Elliott Waves: "Introduction. Classification".Hello!
Dear colleagues, because I am constantly analyzing the markets with the help of wave analysis. Many colleagues ask me about it and I decided to make some tutorial posts to help you in this difficult task.
I want to present this information to you in a simple and straightforward manner.
Well, enough unnecessary text, let's get started!
A bit of history from Wikipedia.
Ralph Nelson Elliott (1871-1948), an American accountant, developed a model for the underlying social principles of financial markets by studying their price movements, and developed a set of analytical tools in the 1930s. He proposed that market prices unfold in specific patterns, which practitioners today call Elliott waves, or simply waves.
Elliott stated that "because man is subject to rhythmical procedure, calculations having to do with his activities can be projected far into the future with a justification and certainty heretofore unattainable."
In simple words, human behavior is quite predictable. And since it is mostly people who trade on the markets, we can predict its movement with some probability.
Well. Let's explore what these waves are.
Let's start by categorizing them.
The movements are mostly carried out by a five-wave structure.
📍 Modes: Motive & Corrective
Waves unfold in two distinct forms: motive and corrective. Motive waves exhibit a five-wave structure, featuring both a five-wave model and its co-directional components—waves 1, 3, and 5. The term "motive" is attributed to this structure due to its inherent ability to energize and set the market in motion. On the other hand, corrective waves, prevalent in countertrend movements, follow a three-wave structure or its variations. The name "corrective" stems from their nature as responses to preceding motive waves, executing partial retracements or "corrections" of the prior progress. Hence, these two wave types stand apart not only in their roles but also in their fundamental construction.
Motive
📍 Styles: Impulse & Diagonal.
There are two types of motive waves: impulse and diagonal. As a rule, they alternate in the position of waves 1-5 impulses and waves A-C of the zigzag.
📍 Patterns: Impulse, Leading Diagonal & Ending Diagonal
Five-wave action model. Creates forward progress.Motive waves are limited to three patterns: Impulse, Leading and Ending Diagonals.
Corrective
📍 Groups: Simple & Combined
The corrective mode has two groups, simple and combined. Combined corrections are subdivided into simple corrective structures.
The group of simple corrections includes: flat, triangle and single zigzag. Combined group — multiple zigzag and combination.
📍 Styles: Sharp & Sideways
There are two styles of corrective processes: sharp and sideways. If wave two of an impulse is a sharp correction, expect wave four to be a sideways correction, and vice versa.
📍 Patterns: Flat, Triangle, Single Zigzag, Multiple Zigzag and Combination 📍
Three-wave or five-wave (which have characteristics of both fives and threes) or their combination model of counteraction. Always produces a net retracement from the previous wave.
Corrective patterns include: single and multiple zigzags, triangle, flat, combination.
Variations
📍Divergences in Elliott Wave patterns manifest in two conditional categories: variations in form and variations in the quantity of simple structures. Impulses, diagonals, flats, triangles, and single zigzags are distinguished by the proportional length of their sub-waves, shaping the model uniquely. On the other hand, combined corrections, incorporating multiple zigzags and combinations, maintain a consistent shape, and their identification is based on the count of simple corrective structures they encompass.
This was an introductory lesson on Elliott waves. Further we will examine each type and subspecies of waves in detail in a separate lesson!
🔔 Click on the links below this lesson! 🔔
📍Part # 8, Combination - Corrective Waves.👩🏻💻 Hello !
This time we're going to look at combinations.
It may seem too complicated, but don't worry. In fact, any combination simply consists of two corrective patterns that you and I already know, only between these two patterns there is a connecting wave.
Let's go straight to the rules and everything will become clear to you at once!
✅ Rules ✅
📍A “double three” combination comprises two corrective patterns separated by one corrective pattern in the opposite direction, labeled 'X'. The first corrective pattern is labeled 'W', the second 'Y'.
📍A "double three" combination comprises (in order) a zigzag and a flat, a flat and a zigzag, a flat and a flat, a zigzag and a triangle or a flat and a triangle.
📍Wave 'X' appears as a zigzag or flat.
📍Wave 'X' always retraces at least 90 percent of wave 'W'.
📍Combinations have a sideways look. With respect to waves 'W' and 'Y' in a double three, only one of those waves in each type of combination appears as a single zigzag.
📍Combinations can occur in the same wave positions as flats and triangles (except for the triangle subwave) but cannot occur in waves 'W' and 'Y'.
✅ Guidelines ✅
📍Wave 'X' is often 123.6-138.2% the 'W' wavelength, less often wave 'X' retraces 161.8% or more. Don't expect wave 'X' to be more than 261.8% of wave 'W'.
📍Wave 'X' is usually a single or multiple zigzag.
📍When a zigzag or flat appears too small to be the entire wave with respect to the preceding wave (or, if it is to be wave '4', the preceding wave '2'), a combination is likely.
Thank you for your attention! There will be another lecture next week! Don't miss it!
🔔 Links to other lessons in related ideas. 🔔
The ultimate guide on Elliott waves in crypto tradingMost of you have probably heard about Elliott waves and we are sure that you don’t use it in cryptocurrency trading strategy because it’s very complicated and subjective approach. Crypto trading for beginners is very challenging and stressful even without Elliott waves. To be honest when we first time tried to implement it to my crypto trading strategies it was a complete disappointment. We were sure that it does not suit for both trading bot and manual trades. Elliott waves were thrown into a garbage bin for almost two years and we developed our crypto trading algorithm using only linear programming approaches.
While we have been trying to invent the best automated trading bot using only indicators and support and resistance levels, best crypto traders have been successfully using Elliott waves in their analysis. Finally we make a decision to have a deep dive in this popular crypto trading tool and studied in details all available literature. As a result we found that Elliott waves will ruin your trading if you use it without special indicators for confirmation. Now we have 2 years of experience in trading with waves and almost one year ago we implemented them into our algorithmic trading bot. Today we prepared the best ultimate guide ever on Elliott waves using best practices and our unique experience how to use them in developing your own profitable crypto trading strategies. Let’s go!
Why it’s vital to use Elliott waves?
Before answer this question, let me ask another one! Why is important to use map to reach the final destination? I think here is the obvious answer! Talking about Elliott waves it’s almost the same reason. This is the only one approach which gives you a map for a price chart. I think you agree that technical indicators or support and resistance levels will not give you the answer which direction the price will choose. When you have, for example Stochastic Oscillator crossover or RSI oversold area hit you just open long because this is the most common strategy. You buy asset like a blind kitten. We are not criticize this approach, because using proper risk and money management you will earn with almost every strategy, but understanding the Elliott waves concept will dramatically increase your profit even if you combine them with your ordinary strategy. Why it’s happening? The answer is easy, because Elliott waves in the underlying structure of the market. You will be aware when you shall use your signals and when it’s better to skip trade. Now let’s dive into the Elliott waves to understand how to find them on the price chart. In the first part we will give you all needed theory and after that we will show in the real charts how it works.
Elliott waves
In general, Elliott waves concept is pretty easy. All markets are globally moving up with the five waves formations and then show the pullback with at the reactive waves. On the Bitcoin price chart above you can see the most common picture for Elliott waves. We had the bull run which consists of five waves and then was the bear market represented with the ABC correction.
Waves can be divided into two groups: impulsive and reactive. On the bullish phase waves 1, 3 and 5 are impulsive, 2 and 4 reactive. Impulsive waves consists also with five sub waves, while reactive have usually three waves (exception the triangle correction, will be covered later). On the bearish phase we have the opposite situation: waves A and C are impulsive, while wave B is reactive. Now let’s discuss each wave in details.
What will stop every wave in 90% of cases?
Before we will observe the wave it’s very important to understand what are the early signs that current wave is about to be finished. This is really crucial concept because without it almost impossible to use Elliott waves for profitable trading. We need four tools to make sure that our counting is correct. In this article we will not spend to much time for these indicators, we just show you in practice how to use them. These tools are: Awesome Oscillator, Market Facilitation Index (MFI), Fibonacci retracement and extension and Fractals. These four indicators produce five wave’s end conditions.
Divergence with Awesome Oscillator. If you found five sub waves inside any wave and you can see that price set the higher high (or lower low for bearish case), while AO set lower high (or higher low) it’s divergence between wave 3 and 5. This is the most powerful signal that trend is over.
Fractal at the top or bottom. When you see the divergence it’s just the first sign of trend weakness, we need confirmation with the fractal forming at the top or bottom. You can easily find this indicator in TradingView, it will show you all fractals.
MFI squat bar. We will cover MFI in one of the next educational articles, now you just need to know that it has squat state - the last battle between bulls and bears. One of the three top bars will be the squat in 80% of waves end. You can also find this indicator in TradingView.
AO momentum change. Another one confirmation that trend is over is when AO histogram changes color. It’s better to wait three consecutive columns of the other color or when AO will cross back the signal line, 5 period MA of the AO.
Target area. Using Fibonacci extension and retracement we can find the area where the reversal is the most likely. We will show you this targets when talking about waves.
Now you know the five basic rules and we are ready to discuss every wave using this concept.
Wave 1
When the previous trend is over the impulsive wave 1 begins. We can define the wave 1 start only establishing the previous wave end. It could be wave 5, C or E. It does not matter. You just need to apply our five rules: divergence, momentum change, target area, squat bar and fractal. On the chart you can see how in theory wave 1 can be looks like.
Wave 1 always consists of five waves. That’s why we can wait for the same five rules to complete between wave 3 and 5 inside the wave 1. When you anticipate the wave 1 finish you have two options: close trade and re-enter at the wave 2 bottom or hold for the entire cycle.
Wave 2
When wave 1 ends, you will see pull back in wave 2. It’s important to catch wave 2 bottom because wave 3 will bring you a lot of profit. Wave 2 can be classical ABC zigzag, flat or irregular correction. 70% probability it will be ended inside 0.38 and 0.62 Fibonacci retracement range of wave 1, in rare cases it can ends higher or lower. That’s why it’s better t count waves inside wave 2 and do not miss when all five trend killing conditions are met in wave C inside 2.
Wave 3
The most impulsive wave in the entire cycle is obligatory for trading. Here you can have the less risky and the most easy trading. Wave 3 has the great fundamental factors as a price drivers. For example, Bitcoin spot ETF triggered a huge pump recently. Let’s imagine you correctly entered at the wave 2 end. Now we have to define wave 3 targets. The target area using fibonacci extension can be found between 1 and 1.61. This is the most likely case. In crypto it’s very often when waves 3 are extended.
To have the most precise target it’s highly recommended to count waves inside wave 3. Found five waves? Check our favorite trend killing rules to exit a trade at the top. We know it sounds fantastic, but we managed to buy the exact bottom and sell at the top many times, but to be honest, we have never caught the top of the extended wave 3. Need more experience for that.
Wave 4
Wave 4 can be the most complicated because it has a lot of different variants: zigzag, flat, irregular or even triangle. But at the same time in wave 4 we can have the easiest setup. When you predicted wave 3 top, it’s time to setup the target for the wave 4. The most reliable one is between 0.38 and 0.5. This wave is not so rapid as wave 2 and takes much more time (up to 70% of all cycle).
The very important tip here is to look at the price where wave 4 inside wave 3 has been ended. If this level coincides with the 0.38-0.5 zone it can give you much more confidence. We have never made a mistake using this technique. As usual you have to look for the five trend killing rules in wave C inside wave 4 as well.
Another one thing we want to point out. You know the axiom, that wave 4 has not overlap wave 1 top. This rule can be slightly violated and we will show you the case. Don’t pay attention that much to this rule.
Wave 5
Finally we are in wave 5. This is really vital to define it’s top because bear market will follow this wave and can destroy your deposits. The target area for the wave 5 is defined as the distance between wave 1 bottom and wave 3 top, measured from wave 4 bottom. Area between 0.61 of this distance and 1 Fibonacci level is our target. There you have to find trend killing rules as usual but this time for all cycle, not subwaves.
Corrections
The most dangerous place for trading is the correction. From our experience only wave C in zigzag is tradable. You would better to skip corrections and try to catch it’s end. We have four types of corrections, but the most important knowledges is that wave C and E are always consists of five waves. It means you can use the rules how to catch wave 5 end inside these waves.
Zigzag ABC. If wave A consists of 5 waves the most like we will see zigzag. Wait when wave B reach 0.5-0.61 Fibonacci of wave A and be ready to trade in wave C.
Flat. Wave A has 5 waves inside. Waves A, B and C are almost equal to each other.
Irregular. Wave B top is higher that the previous impulsive wave. Wave A consists of 3 waves.
Triangle. Consists of A, B, C, D and E waves. Wave E consists of five waves. Usually occurs inside waves 4 and B of higher degree.
Now you have a theoretical description. It’s time to trade!
📍Part #7, Multiple Zigzag - Corrective Waves - Combined.👩🏻💻Hello!
Dear colleagues, this is the 7th lesson on wave analysis and today we are going to look at Multiple Zigzag. We already know what a Zigzag is, so we will not look at this pattern for a long time, but just to clarify that Multiple Zigzag consists of several Zigzags.
Let's get to the rules and guidelines!
✅ Rules ✅
📍A Multiple Zigzag comprise two (or three) single zigzags separated by one (or two) corrective pattern(s) in the opposite direction, labeled "X". In the first case, it is called «double zigzag», in the second - «triple zigzag» (The first single zigzag is labeled "W", the second "Y", and the third, if there is one, "Z".)
📍Waves "W", "Y" and "Z" are always single zigzags.
📍Wave "X" never goes beyond the beginning of waves "W" and "Y".
📍Wave "Y" always ends past the end of the "W", and wave "Z", if any, always ends past the end of the "Y".
📍The first "X" wave always ends on the territory of the "W" wave, the second "X", if any, on the territory of the "Y" wave.
📍In a triple zigzag, the first "X" wave is always a zigzag, flat or combination. The second "X" wave is always a zigzag, flat, triangle or combination.
📍In a double zigzag, wave "X" is always a zigzag, flat, triangle, or combination.
📍Double and triple zigzags replace single zigzags, but cannot appear as "W", "Y", or "Z" waves.
✅ Guidelines ✅
📍In a double zigzag, wave "Y" can equal wave "W", .618 wave "W", 1.618 wave "W", or terminate at a distance equal to 1.618 wave "W" past wave "W". In a triple zigzag, there can be equality among waves "W", "Y" and "Z", or wave "Z" can equal 1.618 wave "Y", 1.618 wave "Y", or terminate at a distance equal to 1.618 wave "Y", past wave "Y". In a triple zigzag, the Fibonacci relationships between waves "W" and "Y", would be the same as a double zigzag.
📍The Fibonacci relationships between waves "W" and "X" in a double zigzag, and waves "Y" and "XX" in a triple zigzag are analogous to the relationships between waves "A" and "B" in a single zigzag.
📍In a double zigzag, as a guideline, wave "b" of wave "Y" should not break the trendline that connects the beginning of wave "W" with the end of wave "X".
📍As a guideline, wave "X" (second wave "X" of the triple zigzag) of a double zigzag should break the trend channel formed by the first zigzag in wave "W" ("Y") and be greater than 80% of subwave "b" of wave "W" ("Y" and "Z").
📍When a zigzag appears too small to be the entire wave with respect to the preceding wave (or, if it is to be wave "4", the preceding wave "2"), the complication of the structure to a multiple zigzag will probably follow.
Thank you for your attention! There will be another lecture next week! Don't miss it!
🔔 Links to other lessons in related ideas. 🔔
1 Setup everyone should know.Trading Structure can be tricky. You can see a Break of Structure (BOS), your trying to get in on retracements and just keep getting Stopped out? This will help.
Trade only after a Liquidity Grab, I'm going to call this a "Grubber". After the Grubber, There must be a STRONG Impulse move which breaks Structure in the Opposite Direction, Then you have to wait for a 3 wave retracement "ABC" The "C" Wave is now your Smaller Time Frame "Grubber" Now wait for the B Wave to be broken (Smaller Time Frame IMPULSE"), This is your smaller Time Frame "BOS" The final Step is to set a Limit order on Imbalance fill.
RISK MANAGEMENT the most important setting?Trading without a structured risk management strategy turns the market into a game of chance—a gamble with unfavorable odds in the long run. Even if you possess the skill to predict more than half of the market's movements accurately, without robust risk management, profitability remains elusive.
Why?
Because no trading system can guarantee a 100% success rate.
Moreover, the human element cannot be disregarded. Over your trading career, maintaining robotic discipline, free from emotional or impulsive decisions, is challenging.
Risk is inherently linked to trading—it represents the potential for financial loss. Continually opening positions without considering risk is a perilous path. If you're inclined to take substantial risks, perhaps the casino is a more fitting arena. In trading, excessive risk doesn't correlate with greater profits. This misconception often leads beginners to risk excessively for minimal gains, jeopardizing their entire account.
While eliminating all risk is impossible, the goal is to mitigate it. Implementing sound risk management practices doesn't guarantee profits but significantly reduces potential losses. Mastering risk control is pivotal to achieving profitability in trading.
A risk management system is a structured framework designed to safeguard trading capital by implementing specific rules. These rules aim to mitigate potential losses resulting from analytical errors or emotional trading decisions. While market predictions can be flawed, the margin for error in risk management should be minimal.
Key Principles of Risk Management:
1. **Implement a Stop Loss:**
- While this might seem elementary, it's often overlooked.
- Many traders, especially when emotions run high, are tempted to remove or adjust their stop loss when the market moves unfavorably.
- Common excuses include anticipating a market reversal or avoiding a "wasted" loss.
- However, this deviation from the original plan often leads to larger losses.
- Remember, adjusting or removing a stop loss is an acknowledgment that your initial trade idea might be flawed. If you remove it once, the likelihood of reinstating it when needed diminishes, clouded by emotional biases.
- Stick to your predetermined stop loss and accept losses as part of the trading process, void of emotional influence.
2. **Set Stop Loss Based on Analysis:**
- Never initiate a trade without a predetermined stop loss level.
- Placing a stop loss arbitrarily increases the risk of activation.
- Each trade should be based on a specific setup, and each setup should define its stop loss zone. If there's no clear setup, refrain from trading.
3. **Adopt Moderate Risk Per Trade:**
- For novice traders, a recommended risk per trade is around 1% of the trading capital.
- This means that if your stop loss is hit, the loss should be limited to 1% of your total account balance.
- Note: A 1% risk doesn't translate to opening a trade for 1% of your account balance. Position sizing should be determined individually for each trade based on the stop loss level and total trading capital.
By adhering to these risk management principles, traders can build a solid foundation for long-term success in the markets, safeguarding their capital while allowing for growth opportunities.
In the scenario of a losing streak—let's say five consecutive losses—with a conservative risk of 1% per trade, the cumulative loss would amount to slightly less than 5% of your trading capital. (The calculation of 1% is based on the remaining balance after each loss.) However, if your risk per trade is set at 10%, enduring five consecutive losses would result in losing nearly half of your trading capital.
Recovering from such losses, especially with a high-risk approach, presents a significant challenge. The table below illustrates this challenge: if you lose 5% of your capital (approximately five losing trades), you would need to generate a mere 5.3% profit to break even—equivalent to just one or two successful trades. However, if you overextend your risk and suffer, for instance, a 50% loss, you would need to double your remaining capital to restore your original deposit.
4. Utilize a Fixed Percentage of Risk, Not a Fixed Amount for Position Sizing
Position sizing should be dynamic, tailored to both your predetermined risk percentage and the distance to your stop-loss level. This approach ensures that each trade is individually assessed and sized according to its unique risk profile. In the following section, we will delve into the methodology for calculating position size for each trade.
5. Maintain Consistent Risk Across All Positions
While different trading styles like scalping, intraday, and swing trading may warrant varying risk levels, it's crucial to cap your risk at a reasonable threshold. A general guideline is to not exceed a 5% risk per trade. For those in the early stages of trading or during periods of uncertainty, a risk of 1% or less is advisable.
The table below offers an illustrative example of the outcomes achievable by adhering to risk percentages tailored to individual trades. Regardless of your confidence level in the potential profitability of a trade, maintaining consistent risk per trade is paramount.
6. Avoid Duplicating Trades Based on the Same Setup
Opening identical trades based on a single setup doubles your exposure to risk. This principle is especially pertinent when dealing with correlated assets. If you identify a favorable combination of factors across multiple trading pairs, opt to execute the trade on the pair where the setup is perceived to have a higher probability of success.
7. Aim for a Risk-to-Reward Ratio of at Least 1:3
The Risk-to-Reward (RR) ratio measures the potential profit of a trade relative to its inherent risk. A RR ratio of 1:3 signifies that for every 1% risked through a stop-loss activation, a trader stands to gain 3% of their deposit upon a successful trade.
With a 1:3 RR ratio, a trader doesn't need to be correct on every trade. Achieving profitability in just one out of every three trades can result in a net positive outcome. While RR ratios of 1:1 or 1:2 can also be profitable, they typically require a higher win rate to maintain profitability.
For instance, if you're willing to risk 1% to gain 1%, you'd need at least 6 out of 10 trades to be profitable to yield a positive return. It's worth noting that a high RR ratio doesn't guarantee profitability. It's possible to have trades with a 1:6 or greater RR ratio and still incur losses if the win rate is insufficient.
How to use Williams Alligator Indicator in crypto trading?You have probably heard about Alligator, indicator which is used by top crypto traders. This powerful tool can increase performance of every cryptocurrency trading strategy and help you to make money on the market. Alligator gives us the precise answer if now price is in impulsive or reactive wave. This knowledge is very useful in building your own crypto trading strategies or even in automated trading bot strategies. Even if you use grid bot strategy Alligator can increase your return on investment because it’s vital to set up grid bot in reactive wave and sideways movements. What is the beast Alligator, let’s have a deep dive into this topic today!
What is Alligator?
Alligator is the best indicator for trend detection. It consist of three moving averages which are called jaw, teeth and lips. Moving averages are frequently used in algorithmic trading bots. They can be exponential, smoothed or weighted depending on particular crypto trading algorithm, but we will use smoothed moving averages (SMA).
Jaw (blue line) - 13 period SMA shifted 8 bars is the future. This is the balance lie of the current time frame, for example 1D
Teeth (red line) - 8 period SMA shifted 5 bars in the future. This is balance line of lower degree time frame, for example 4h
Lips (green line) - 5 period SMA shifted 3 bars in the future. This is balance line of two times lower degree time frame, for example 1h
Please, be careful when you use Alligator on different cryptocurrency trading platforms. Check the correct settings and moving average type. On TradingView it’s correct, don’t worry!
Trend detection with Alligator.
The main Alligator’s feature is the detection the trending markets and markets which are about to explode in any side. This powerful tool can enhance your crypto trading algorithm if you use it in the correct way. On the ATOM price chart you can see the example of an Alligator. As you can see it has two conditions: sleeping and hungry.
Sleeping Alligator is when all lines are crossing each other and the price. This period of time can takes up to 80% of time. This is the market cycle stage where you shall avoid any trading and be prepared for the trending market
Hungry Alligator is when after a long period of consolidation price chose the trend direction. It’s an impulsive move. Alligator’s mouth is widely opened and do not crosses the price.
It’s very important to distinguish the trending market because only this type of a market gives you opportunity for the fast and huge profit. Otherwise, in the range bounded market you don’t have enough space for price to make profit for you. Most of stop losses occur while Alligator is sleeping. Another one very useful hint for you. If you use Elliott waves analysis. You don’t need to understand in which wave market is now. You just jump into the impulses and avoid corrections.
How to trade with Alligator
Here is the most interesting part. How to start crypto trading using Alligator? Our basic strategy is to wait when the price will create the first fractal above the Alligator’s mouth and place conditional order to buy one tick above the fractal’s top. We will discuss fractals in details next time. Now you have to understand how to use Alligator.
Another one hint from our experience is to use fractals only when Alligator has been sleeping for a long time, like you see on the BTC chart. After long sleep and fractal breakout Bitcoin showed the greatest bull run in the history.
Let’s notice where we should close trade. Almost at the top! When price started showing weakness we don’t need to be in the market anymore. Using this strategy on 1W time frame you can hold assets during entire bull run and sell then before bear market. Fantastic! Isn’t it?
Conclusion
In this article we discussed how you can implement Alligator indicator in your trading routine. This indicator will help you to avoid boring market when you can only lose money and catch every big move. Moreover you can use even sideways market detection if you use cryptocurrency trading bot which earns money in range bounded market. For sure this in not the only one strategy using Alligator. Next time we enhance our approach with other tools and see in details how Alligator improve their profitability. Moreover, soon we will live stream where practice trading with Alligator. See you next time!
Best regards,
Skyrex Team
📍Part #6, FLAT - Corrective Waves-Simple-Sideways corrections.👩🏻💻Hello!
In this lecture, we will cover one of the options for corrective cycles, namely Flat.
Let's now look at the 'flat' separately as a stand-alone correctional structure. I remind you, 'flat' and 'plane' are essentially the same thing. So, the 'flat' always has a three-wave structure, and it looks like this: 3-3-5. That is, you can identify it by the third wave "C", which always has a five-wave structure. But it can also be a Ending diagonal. And all this will be within the scope of a regular 'flat' or 'plane'. If we draw a line from the base of wave A and the maximum of wave "B", and then also draw a line or level from the end of wave "A" and the end of wave "C", we will get parallel lines, which is exactly what the name Flat hints. And this wave "B" should roll back approximately 90% of wave "A" for everything to look nice. But not always, because there is also an expanded 'flat' and a running 'flat', whichever you prefer.
Well then. Let's look at the main rules and guiding norms for flats.
✅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.
✅Regular Flat✅
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 correction.
✅Expanded Flat✅
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 correction.
✅Running Flat✅
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.
Thank you for your attention! There will be another lecture next week! Don't miss it!
🔔Links to other lessons in related ideas.🔔
Types of liquidityLiquidity:
LQ High/Low
LQ Strong High/Low => Swing High/Low
LQ trendline
LQ Equal High/Low
Liquidity => Strong High/Low => Break => Swing High/Low
Mind the Gap: How to Trade Price GapsThe Power and Beauty of Price Gaps
Price gaps represent a clear imbalance in supply and demand, making them one of the purest representations of momentum in financial markets. These gaps occur when there is a significant disparity between the closing price of one period and the opening price of the next, indicating a sudden surge in buying or selling pressure.
How to Trade Price Gaps: 3 Different Strategies
1. Gap & Go:
Description: This strategy involves trading in the direction of the gap, anticipating that the momentum will continue.
Execution: Enter trades as soon as the market opens, aiming to capture the initial momentum surge.
Timeframe: Typically applied on shorter timeframes, such as intraday charts.
Risk Management: The gap can be used for stop less shelter, hence stops can be placed above (below) the gap.
Example: Tesla (TSLA) 5min Candle Chart
In this example, Tesla gaps lower at the open – breaking below a key level of support and signalling the breakdown of a sideways range. The gap follows through to the downside during the remainder of the trading session.
Past performance is not a reliable indicator of future results
2. Gap Fill:
Description: In contrast to the Gap and Go strategy, this approach involves fading the initial price movement and trading in the opposite direction of the gap.
Execution: Wait for price to retrace back to pre-gap levels before entering trades, anticipating that the gap will eventually be filled.
Timeframe: Can be applied on various timeframes, depending on the magnitude of the gap and market conditions.
Risk Management: Implement stop-loss orders to manage risk, as price may continue to move against the trade.
Example: Barclays (BARC) Hourly Candle Chart
Barclays gap above key resistance on the hourly candle chart. The gap is filled and broken resistance turns to support prior to the uptrend resuming.
Past performance is not a reliable indicator of future results
3. First Pullback:
Description: This strategy combines elements of both Gap and Go and Gap Fill, focusing on entering trades after the initial momentum surge but waiting for a pullback or consolidation before entry.
Execution: Wait for the first pullback or consolidation after the gap before entering trades in the direction of the prevailing momentum.
Timeframe: Suitable for both shorter and longer timeframes, depending on the magnitude of the gap and market dynamics.
Risk Management: Utilise stop-loss orders to protect against adverse price movements and adjust position sizing based on volatility.
Example: Arm Holdings (ARM) Hourly Candle Chart
Arm’s share price puts in a large price gap which breaks decisively above a key level of resistance on the hourly candle chart. Given the size of the gap, optimal entry requires waiting for the market pullback.
Past performance is not a reliable indicator of future results
Additional Factors to Consider
Catalyst Behind the Gap:
Look for stock-specific news events that recalibrate market expectations, such as earnings surprises or changes in outlook.
Mechanical events like dividends or corporate actions are less likely to sustain momentum.
Size of the Gap:
Larger gaps indicate stronger momentum but also carry a higher risk of mean reversion.
Assess the magnitude of the gap relative to historical price action and volatility.
Levels Broken:
Consider the significance of key support and resistance levels broken by the gap, as they may influence the strength and direction of the price movement.
Prevailing Trend:
Analyse the prevailing trend before the gap and assess whether the gap aligns with the overall market direction.
By incorporating these factors into your analysis and selecting the most suitable strategy based on market conditions, you can effectively trade price gaps and capitalise on momentum opportunities in the financial markets. Remember to exercise proper risk management and adapt your approach as market conditions evolve.
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 84.01% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
