Elliot Wave confirmed?
We finished a Wave 1 at $9100. That means we had to finish a Wave 2. The question is where does Wave 2 end?
At first we thought $8744. It recovered strong to $9093, but then slowly crashed first to $8592, then to $8450. Was $8450 the bottom?
After exiting $8450 it shot up to $8678 but then for several agonizing hours lived in a descending triangle. It looked like it was going to break the descending triangle downward because it breached the horizontal briefly. But be patient!!! Sometimes it goes back up, which it did. Almost immediately after peeking through the bottom of the descending triangle, it began a journey up to break the descending triangle upward to it's current place.
The entire time it has not broken my Elliot Wave lines, and now has confirmed the counts are correct.
The only question is this: Are we still on Wave 1, instead of starting Wave 3? Not likely. The impulse Wave 1 clearly lost steam when the price hit $9150. It began a sideways movement that is consistent with a corrective wave.
Lessons Learned:
1. Never assume you had defined the correct bottom of wave 2. Put in a stop loss sell at your buy-in price because if you're on a wave 3, you should never revisit this price again.
2. Always allow the price to exit a pattern momentarily. It has to stay out of the pattern for several candles to confirm that it has broken it. Sometimes the price can exit a channel or pattern for several candles and then circle back in again.
Technical analysis is extraordinary. But it takes a lot of practice. Knowing TA is one thing, but knowing how to trade with the knowledge is another and takes a lot of practice and time. Charting and Trend analysis must be paired with Elliot Wave analysis IMO. Even if you defined support and resistance regions, and drew trend lines and patterns - it still doesn't have the 3 cardinal rules of Elliot Wave which determine when you've predicted a direction wrong. That's the main benefit of Elliot Wave: determining the price direction.
At first we thought $8744. It recovered strong to $9093, but then slowly crashed first to $8592, then to $8450. Was $8450 the bottom?
After exiting $8450 it shot up to $8678 but then for several agonizing hours lived in a descending triangle. It looked like it was going to break the descending triangle downward because it breached the horizontal briefly. But be patient!!! Sometimes it goes back up, which it did. Almost immediately after peeking through the bottom of the descending triangle, it began a journey up to break the descending triangle upward to it's current place.
The entire time it has not broken my Elliot Wave lines, and now has confirmed the counts are correct.
The only question is this: Are we still on Wave 1, instead of starting Wave 3? Not likely. The impulse Wave 1 clearly lost steam when the price hit $9150. It began a sideways movement that is consistent with a corrective wave.
Lessons Learned:
1. Never assume you had defined the correct bottom of wave 2. Put in a stop loss sell at your buy-in price because if you're on a wave 3, you should never revisit this price again.
2. Always allow the price to exit a pattern momentarily. It has to stay out of the pattern for several candles to confirm that it has broken it. Sometimes the price can exit a channel or pattern for several candles and then circle back in again.
Technical analysis is extraordinary. But it takes a lot of practice. Knowing TA is one thing, but knowing how to trade with the knowledge is another and takes a lot of practice and time. Charting and Trend analysis must be paired with Elliot Wave analysis IMO. Even if you defined support and resistance regions, and drew trend lines and patterns - it still doesn't have the 3 cardinal rules of Elliot Wave which determine when you've predicted a direction wrong. That's the main benefit of Elliot Wave: determining the price direction.
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Wyłączenie odpowiedzialności
Informacje i publikacje przygotowane przez TradingView lub jego użytkowników, prezentowane na tej stronie, nie stanowią rekomendacji ani porad handlowych, inwestycyjnych i finansowych i nie powinny być w ten sposób traktowane ani wykorzystywane. Więcej informacji na ten temat znajdziesz w naszym Regulaminie.