Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.

thalestrader

Reading Charts in Real Time

Recommended Posts

Hi Folks,

 

I thought it would be interesting if we had a thread where we could all post charts of potential price moves in real time. These do not have to be actual trades you are taking. The purpose would be for us to learn from one another how to recognize these opportunities in real time. Therefore, when you post a chart, be sure to clearly state the direction in which you anticipate price to move, and the reason you are interpreting price action in that manner. This is not a thread for secrets, show-offs, or salespeople selling systems.

 

 

I'll start off with the GBPUSD here soon after the markets have reopened for trading this Sunday evening. Looks like a potential short trade if there is a break of 1.6421 (For the record, I am not trading this).

 

The first red arrow would have been a nice short entry as the Cable put in a 1-2-3 top per Trader Vic (easy to see after the fact). The second red arrow swas a second chance short entry on the retest of the break of the "2" point on that 1-2-3 top (also easy to see in hindsight).

 

The third red arrow is the current market as price is trying to find support. If that support does not hold, a test of 1.6389 - 1.6406 would be next. I have some family time now, so I'll check in later and update the chart.

 

Best Wishes,

 

Thales

5aa70ee733c2d_6-14-2009GBPUSD.thumb.jpg.66a661b0fabc68d84c9ef06e4bce6569.jpg

Edited by thalestrader

Share this post


Link to post
Share on other sites
The third red arrow is the current market as price is trying to find support. If that support does not hold, a test of 1.6389 - 1.6406 would be next.

 

Price did decline into the next area of anticipated support. A nimble scalper should have been able to come away with a respectable amount of ticks even as buyers stepped in at the anticipated support level surrounding Friday's reversal higher.

 

Natural stops are indicated by the dashed red lines. Any trade above there would certainly be enough to have me out of the market if I hadn't already taken myself out.

 

Best Wishes,

 

Thales

5aa70ee739b0b_6-14-2009GBPUSDContinued.thumb.jpg.5e1b632c859882837c750afbf8d1fa2e.jpg

Share this post


Link to post
Share on other sites
If I were short from the initial post, and I had I stayed short this far into the rally off the low, I'd right now have my stop fixed at a tick or so above that last reaction high.

 

And at this point the stop would be more or less at breakeven (+/- a few ticks). I'd be looking for a retest of the 1.6393 low, and if that breaks and price holds below it, then the green dashed lines would be the next target.

5aa70ee74540b_6-14-2009GBPUSDRevisedStop2.thumb.jpg.ceb5420a2613acdddbfb55151db36b29.jpg

Share this post


Link to post
Share on other sites
I'd be looking for a retest of the 1.6393 low, and if that breaks and price holds below it, then the green dashed lines would be the next target.

 

Price broke 1.6393, and quickly popped back above that level, but not by much. Price will need to break and hold below the shaded rectangular area to keep pressure on the downside and press toward a retest of the dashed green support zone around Friday's low.

 

The chart shows how the rectangular box is calculated using a fib extension tool - as you can see, as I was taking this screen shot, price has started to get in gear to the downside.

5aa70ee74baa0_6-14-2009GBPUSDExtensionSupport.thumb.jpg.2ff8c28637f5ed7ea225876e78a51171.jpg

Share this post


Link to post
Share on other sites
Price will need to break and hold below the shaded rectangular area to keep pressure on the downside and press toward a retest of the dashed green support zone around Friday's low ... price has started to get in gear to the downside.

 

Closing in on support, and I'd be moving my stop to protect some profit. 1.6401 would be one tick above the highest price reached after price first poked below the 1.6393 support.

 

If you look at a time based chart (1 or 2 minute, for example), and you will se that there was a bit of resistance built at 1.6379. I guess that if I were trading this and I had a position that could be broken in two parts, I'd have a stop on half at 1.6380 and on the other half at 1.6401. I would probably also place a buy limit to take profits on one half at 1.6350.

5aa70ee7516a9_6-14-2009GBPUSDProgresstowardSupport.thumb.jpg.b9a6ab89a759ee11ee73c90f3e2b8f56.jpg

Share this post


Link to post
Share on other sites
I guess that if I were trading this and I had a position that could be broken in two parts, I'd have a stop on half at 1.6380 and on the other half at 1.6401. I would probably also place a buy limit to take profits on one half at 1.6350.

 

Since I didn't trade this, it is hard to say what I would have done here, but price jumped quick off that 1.6359 and I may have taken some off there.

 

If not, I'd have one stop at 1.6380 (+40 ticks) and one at 1.6401 (+19 ticks), presuming I had a position that cold be broken in twain.

 

See you on the other side of the night.

 

Best Wishes,

 

Thales

 

PS As I was about to shut down I see that the first stop was just hit, so that would leave one half open with a stop at 1.6401. If I actually had this trade open, and I had just taken +40 ticks on half, I'd pull my limit orders and set up a 50-75 tick trailing stop and then I'd go to bed and see what it looked like in the morning.

5aa70ee757773_6-14-2009GBPUSDProgress1.thumb.jpg.64a10cce5562dac31f3c5ebf3a12f4b6.jpg

5aa70ee75d203_6-14-2009GBPUSD1stStophit1.thumb.jpg.c3745ee2571beef88e6bd351ff927a00.jpg

Share this post


Link to post
Share on other sites
See you on the other side of the night ... and see what it looked like in the morning.

 

Hi Folks,

 

Well, had it been a real trade and had I sat up to monitor it through the night, it looks to me that the second hald would have been stopped out at 1.6337 or so for an 80 +/- tick profit.

 

The first 1/2 was stopped out at an admittedly arbitrary stop loss level. The second chart shows the natural progression of stop levels for this "trade." Had the whole trade been managed accoring to the stops dictated by price action itself, then a +80 tick profit on the whole position would have been attainable, and at one point, the open trade equity would have been 100 ticks +/-.

 

Of course, unless one is trading real money it is always a mere academic excercise to conjecture how the trade might actually have turned out, as even sim trading does nothing to train that most important prt of the traders soul - that part that deals with fear, greed, and the desire to be right, or at least not to be wrong.

 

A 50 tick trailing stop would have been stopped out at 1.6354 for +66 ticks; and a 75 tick trailing stop would have been stopped out at just about the same price as the first 1/2 position was last night at 1.6379 for +40 ticks give or take a few ticks.

 

 

Best Wishes,

 

Thales

5aa70ee7698fb_6-14-2009GBPUSDComplete.thumb.jpg.f5e68fffa35eb7d2b81357d6adf35190.jpg

5aa70ee76f56e_6-14-2009GBPUSDNaturalStops1.thumb.jpg.a6e527c834aa4fc31e4281cd3cbce34f.jpg

Share this post


Link to post
Share on other sites
I thought it would be interesting if we had a thread where we could all post charts of potential price moves in real time.

 

Well, I still think it will be interesting, but then again, I watch charts for fun!

 

I'm going to continue with the GBPUSD. I am not trading it, and I do not trade forex (though I occassionally day trade the 6B and 6E).

 

I am looking at a short trade at 1.6301, based on price reversing the HHHL pattern of the afternoon rally with a potential LHLL.

 

Inital stop loss is placed at 1.6329

 

Profit objective is a retest of today's low at 1.6241.

 

Best Wishes,

 

Thales

5aa70ee7bd89a_6-15-2009GBPShortat1point6301.thumb.jpg.4b9d0e2b4eb8fe48c07fac0c725fcb98.jpg

Share this post


Link to post
Share on other sites
With that new low, stop loss could probably be lowered to 1.6322

 

 

lowering stop to 1.6313

 

This price decline has a good bit more overlap and choppiness than I'd expect of it for a retest of today's low.

5aa70ee8046b7_6-15-2009GBPReviseStop2.thumb.jpg.15890bee01e41c89052d4d391713e714.jpg

Edited by thalestrader
spelling

Share this post


Link to post
Share on other sites
lowering stop to 1.6313

 

This price decline has a good bit more overlap and choppiness than I'd expect of it for a retest of today's low.

 

Downside price action has started to get into gear with a low at 1.6262, a decline of 40 ticks. A reasonable profit target would be a limit at the 1.6241 low +/- a few ticks.

 

I'd like to see price give a natural stop point within profitable territory so the stop could be safely lowered to capture some of the move.

5aa70ee80b79b_6-15-2009GBPUpdate1.thumb.jpg.d3f36a32b9062152cc126b7fdaed57b1.jpg

Share this post


Link to post
Share on other sites
I'd like to see price give a natural stop point within profitable territory so the stop could be safely lowered to capture some of the move.

 

No sooner had I posted the previous update and price obliged with a new stop point at 1.6277 which would lock in +25 ticks or so.

5aa70ee8132b5_6-15-2009GBPUpdate3.thumb.jpg.a54a1b9ae050235dc9c83b088c5b7922.jpg

Share this post


Link to post
Share on other sites

BOOM!

 

 

 

When price chewed through this morning's low it found a nearly 30 tick vacuum waiting for it!

 

Obviously, had one traded it with a limit, the limit would have been filled for approximatley +60 ticks. If one were trailing, then at this point I would probably move my stop down to 5-10 ticks above this morning's low.

5aa70ee818c61_6-15-2009GBPBoom.thumb.jpg.374066ade403f5bc719552cc2d426f4a.jpg

Share this post


Link to post
Share on other sites

The market has rallied back to test the breakdown from this morning's low. It first rallied to 1.6239 before falling back, and price has now rallied to 1.6242, besting the low by one tick, and has now fallen back a few ticks.

 

If I were still short here, I'd bring my stop down to 1.6243.

5aa70ee81e8db_6-15-2009GBPBounce.thumb.jpg.794b312f3490d019cd3f918f728ea946.jpg

Share this post


Link to post
Share on other sites

Hi Folks,

 

This has turned out to be a far sleepier thread than I thought it would be. But reading charts from the "hard right edge" as they say is what this business is all about, so I'll carry on for a bit longer.

 

The first two charts, BNI (+30 cents) and AET (+06 cents) are trades that are finished and in the books.

 

The next two show AKS and NUE consolidating at the highs of the day, and may be long trades for me later in the day (while not a hard and fast rule, I try not to enter new positions between 11:30 am and 1-1:30pm unless the move is exceptionally strong).

 

The last chart shows HUM, and the sometimes result of trading breakouts to new highs/lows. I didn't take HUM, as I saw it after the fact, but I would have been tempted to trade that breakout (which would have resulted in a quick loss.

 

Best Wishes,

 

Thales

5aa70ee8b46ef_6-16-2009BNI1.jpg.7a3f0afb75c3e3dbf9a9deeeea13c6cf.jpg

5aa70ee8b8dd0_6-16-2009AET1.jpg.996976a119ef43cadf5e8f10d8200630.jpg

5aa70ee8bd492_6-16-2009AKS1.jpg.7b1521628a44ddfdb59c4a81c03a774f.jpg

5aa70ee8c2183_6-16-2009NUE1.jpg.174e8ce524518bab1887bee103dba56d.jpg

5aa70ee8c65db_6-16-2009HUM1.jpg.b41f206147bdee7b29d81a87c30326a5.jpg

Share this post


Link to post
Share on other sites
The next two show AKS and NUE consolidating at the highs of the day, and may be long trades for me later in the day (while not a hard and fast rule, I try not to enter new positions between 11:30 am and 1-1:30pm unless the move is exceptionally strong).

 

NUE false breakout - I didn't take that one either (but not to worry, I do my part to take more than my share of fakeouts!)

5aa70ee8ca60a_6-16-2009NUE2.jpg.a8f27783ecbd3ffd6a7b3ba6fccff820.jpg

Share this post


Link to post
Share on other sites

Thought I would give ths a shot. I am not trading this with real money. My green line show where a new high broke out and would have been my buy point. The red lines shows where my stop would be and the blue lines shows where I think upper resistence might come based on prior days resistence. I would set a sell at the blue line in order to just take profits and move onto the next trade. Hopefully my attachment worked.

 

attachment.php?attachmentid=11417&stc=1&d=1245166913

PLD.png.0a4b9aaaa1a4da02aa3aa63283a9ede9.png

Share this post


Link to post
Share on other sites

I wanted to post this 6B (Pound Futures) or GBPUSD short trade as it was setting up, but I was busy getting a bunch of orders entered. It has progressed nicely while I was trying to annotate the chart.

 

First chart is the GBPUSD as the trade got started, and the second is the futures contract 6B (it has reached first support/profit target).

5aa70ee8f08f3_6-16-2009GBPUSD1.thumb.jpg.891d55fd9158b60e1ab0d80130c74e10.jpg

5aa70ee9025f2_6-16-20096BShort1.thumb.jpg.7aa326ec4a5ff4b9f3cc200ebdd95927.jpg

Share this post


Link to post
Share on other sites
Everything has turned to the downside over the past hour so short positions would be what I am giving more attention to. Would you agree?

 

 

Short ZMH (see chart).

 

Yes, all of my positions are shorts right now.

5aa70ee906cd1_6-16-2009ZMHShort41051.jpg.07d88c7d04cf190fbd3a712a727e5623.jpg

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Topics

  • Posts

    • Amid the bearish charge witnessed in Bitcoin (BTC) on Monday, El Salvador President Nayib Bukele revealed that the country bought the dip. El Salvador’s Bitcoin Law went into effect on September 7, making it the first sovereign nation to adopt the flagship cryptocurrency as legal tender. President Bukele announced via Twitter that his government acquired an additional 150 BTC with the dip. He tweeted that: BTC traded around $45,000 when Bukele made the announcement yesterday. However, the cryptocurrency has since dropped to the lower-$40,000 area, according to data from TradingView. Meanwhile, ATM tracking website Coinatmradar.com recently revealed that the North American nation now has 205 crypto ATM locations, the third-largest by a country (behind the US and Canada). The launch of the Chivo wallet, the country’s official crypto wallet, started with a rocky start. However, Bukele has assured that the Chivo app now operates in optimal capacity. Reports show that the full adoption of the Chivo app could cost remittance providers like Moneygram and Western Union over $400 million per annum. Last Friday, Bukele tweeted that about 1.1 million Salvadorans now use the Chivo wallet, adding that: “we haven’t enabled 65% of phone models yet.” Key Bitcoin Levels to Watch — September 21 BTC has fallen to a new monthly low of $40,140 following the industry-wide crash. The benchmark cryptocurrency now struggles to pick itself up and back to recent highs. Already, Bitcoin is on track to post a red monthly candle for September as it always has since it went mainstream. BTCUSD – 4-Hour Chart That said, we expect a steady rebound above the $44,000 mark and higher over the coming hours. Nonetheless, we could see a retest of the $41,000 mark if bulls fail to reclaim the $44,000 level soon. Meanwhile, our resistance levels are at $44,000, $44,400, and $45,000, and our key support levels are at $43,000, $42,000, and $41,000. Total Market Capitalization: $2.02 trillion Bitcoin Market Capitalization: $816 billion Bitcoin Dominance: 42.4% Market Rank: #1   Source: https://learn2.trade 
    • Ethereum price breaks moving averages resumes downward Ether targets the low of $2,082 Key Highlights Ethereum ETH) Current Statistics The current price: $2,908.05 Market Capitalization: $341,770,388,786 Trading Volume: $28,141,190,537 Major supply zones: $3,000, $3,500, $4,000 Major demand zones: $2,500, $2,000, $1,500 Ethereum (ETH) Price Analysis September 22, 2021 Ethereum’s (ETH) price has fallen below the moving averages suggesting a further downward movement of the crypto. The bears have also broken below the previous low at $3,026 to another low of $2,656. As the biggest altcoin falls below the previous low, further downsides are likely. Meanwhile, on September 7 downtrend; a retraced candle body tested the 50 % Fibonacci retracement level. The retracement indicates that Ether will fall to level 2.0 Fibonacci extension or level $2,082.71. ETH/USD – Daily Chart ETH Technical Indicators Reading The crypto’s price is now below the moving averages which suggest that Ether is in the bearish trend zone. The altcoin is capable of falling in the bearish trend zone. Ether is at level 40 of the Relative Strength index period 14. It indicates that the altcoin is in the downtrend zone and below the centerline 50. The coin is above the 20% range of the daily stochastic. It indicates that the market is in the bullish trend zone. Conclusion Ethereum is likely to further decline as price breaks below the previous low at level $3,026. Nevertheless, the Fibonacci tool has further indicated a downward move to level 2.0 Fibonacci extension. ETH/USD – 4 Hour Chart   Source: https://learn2.trade 
    • Date : 24th September 2021. Market Update – September 24 – Yields Leap higher. Market News   USD (USDIndex 93.10) weakened to Wednesday lows (92.94) post BOE, SNB, Norges Bank, CBRT, weak PMI’s & Claims and Evergrande missing interest payment deadline – AND no comments from the company. US Federal budget – stand-off continues. Yields stormed higher overnight (10yr closed higher at 1.336%) jumped 10bps to 1.434% in Asian trades (highest since March 2020) Equities rallied again over 1%, sentiment rises but Evergrande worries persist (HSBC, UBS & Blackrock – exposed to a total of $875m). Total offshore exposure – $20bln of the $300bln. USA500 +53 (+1.21%) at 4448. USA500.F lower at 4433. Dow +1.48%. NIKE & Costco beat Earnings. Asian mixed – Nikkei +2%, China lower. VIX tumbles again to 20.50 USOil continues to recover breaches $73.00 – GS talk of $85+ if there is a cold winter. Gold dropped to $1737 (31 day low) has recovered to $1755 now. Overnight – NZD trade balance tanked, JPY CPI & Manu & Services PMI all missed, UK Consumer Confidence halved (-13 vs -7). European Open – December 10-yr Bund future down -24 ticks, alongside broad losses in US futures. Norway kicked off rate hikes in Europe, BoE is also inching towards reduced stimulus which together with Fed tapering hints this week seems to have triggered a market shift. Stocks weren’t too spooked by the yields rise, but uncertainty over Evergrande’s USD coupon payments and lingering concern that China’s property boom could implode and the growth engine running out of steam has seen equity markets turning more cautious once again. DAX future currently down -0.1%, FTSE 100 future little changed. FX markets flat – Sterling holds up, JPY weaker – EURUSD at 1.1732 & Cable at 1.3725 USDJPY recovered to 110.50. Today – German IFO, US New Home Sales, FedSpeak Williams, Mester, Clarida, Powell, George, ECB’s Elderson, BoE’s Tenreyro. Biggest Mover @ (06:30 GMT) GBPJPY (+0.22%) 3 day rally from summer low at 149.40 continues after Hawkish BOE. spiked to 151.70 earlier. Faster MAs aligned higher, MACD signal line & histogram broke 0 line yesterday, RSI 74.50 OB but still rising. H1 ATR 0.150, Daily ATR 0.695. Always trade with strict risk management. Your capital is the single most important aspect of your trading business. Please note that times displayed based on local time zone and are from time of writing this report. Click HERE to access the full HotForex Economic calendar. Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE! Click HERE to READ more Market news. Stuart Cowell Head Market Analyst HotForex Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • Date : 23rd September 2021. Market Update – September 23 – FOMC talk November Taper.Market News   USD (USDIndex 93.52) rallies following FOMC – Taper possible from November, first rate rises now brought forward into 2022, Evergrande due to pay local bondholders today, shares rise in HK. Yields flattened as 5yr up 30 yr down – (10yr closed higher at 1.336%) trade at 1.329% now. Equities rallied over 1%, sentiment rises but Evergrande worries persist (HSBC, UBS & Blackrock – exposed to a total of $875m). USA500 +41 (+0.95%) at 4395. USA500.F flat at 4396. Dow +1.00%, Nasdaq +1.02%. Nikkei (closed) & China higher. VIX tumbles to 21.62. USOil continues to recover broke $72.00 – inventories in line (-3.5m barrels). GS talk of $85+ if there is a cold winter Gold dropped to $1760 but has recovered to $1764. Overnight – FED Highlights – We now have 9 forecasts of a 2022 rate hike instead of 7, with 9 instead of 11 now expecting no change. From the dots, it’s clear that the large majority of policymakers want to start raising rates in late-2022 & get back to near-normal by 2024. GDP, saw trimmings for the Fed’s 2021 central tendency to 5.8%-6.0% from 6.8%-7.3%, 2021 headline and core PCE chain price central tendency boosts to 4.0%-4.3% and 3.6%-3.8% respectively. 2021 jobless rate central tendency boosts to 4.6%-4.8%. POWELL – “substantial further progress” has been met for inflation, but there is more uncertainty surrounding the maximum employment goal. Powell noted a split among the FOMC whether employment has improved satisfactorily. He thinks it has “all but been met”. Tapering “could end around the middle of next year.”AUD PMI’s stronger than expected but remain very weak (Services only 44.9).European Open – The December 10-year Bund future is down 21 ticks, the 30-year future meanwhile has moved higher with Treasury futures. DAX & FTSE 100 futures are up 0.5% with risk appetite strengthen post-Fed and amid easing concern on Evergrande, at least for now. In FX markets both EUR and pound strengthened against a steady to lower dollar. Investors are likely to remain cautious ahead of the local central bank announcements from BoE, SNB and Norges Bank today. EURUSD at 1.1715 & Cable at 1.3653. USDJPY recovered to 109.86. BoE Preview: Expected to keep policy settings on hold, but minutes will be watched carefully especially with 2 new MPC members – Catherine Mann (Centrist) & Huw Pill (Hawkish). The central bank already signaled a more hawkish outlook on rates at the previous meeting, which to a certain extent pre-empted the jump in inflation and tightness in labour markets that were the key message of last week’s economic reports. However, retail sales numbers were pretty dismal & consumers are facing higher taxes as well as a phased out wage support, with the phasing out of the furlough scheme a key factor for the BoE’s policy decision going forward. On top of this the country is facing an energy crisis that is having unexpected knock on effects also for the food sector. The central scenario at the moment is for the labour market to remain tight & wage growth strong, as companies are increasingly forced to up wage offers to attract staff. Against that background, the first rate hike could come in H1 2022, depending on virus developments & how the energy market gets through the winter.Today – SNB, Norges Bank (rate hike likley), BoE, CBRT & SARB rate decisions, Eurozone, UK & US flash PMIs, US Weekly Claims, Canadian Retail Sales, ECB’s Elderson.Biggest Mover @ (06:30 GMT) CADJPY (+0.38%) 3 days in row! Breaks two day high t 86.00 and rallied to 86.32 now. Faster MA’s aligned higher, MACD signal line and histogram broke 0 line yesterday, RSI 72.96 OB but still rising. H1 ATR 0.150, Daily ATR 0.695.Always trade with strict risk management. Your capital is the single most important aspect of your trading business. Please note that times displayed based on local time zone and are from time of writing this report.Click HERE to access the full HotForex Economic calendar.Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!Click HERE to READ more Market news. Stuart Cowell Head Market Analyst HotForex Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • I'm gonna pull a crazyCzarina and reply to a long dead post ... One sure thing about trading forums - The great questions never get an answer.  Ask  even the greatest posters a great question... silence, no nothin’, not even crickets.          First a few comments about Elliott Wave Wave Theory is a ‘science’ of socionomics.  Socionomics is about how societal ideas ‘ideally’ or typically unfold -  wave 1 is the early adapters, wave 3 is broad collective acceptance, wave 5 is continuing valuation narratives but with narrowing collective assessment of actual value... with all kinds of ‘ideal’ sub patterns... Socionomics starts with a simple observation: For lots of issues, how people FEEL influences how they will BEHAVE.  (Equally true = How people BEHAVE influences how they will FEEL... but that’s for another topic) Anyways... Elliott Wave theory is an attempt to apply socionomics  to trading   - and  yes analyst75 “theory” is the key word.  Imo, it’s a jump too far.   First, price is not a good metric for socionomics.... especially across decades when currencies are being viciously  'corrupted'.   And practically, socionomics does not transfer over to trading nearly to the degree Ellioticians would like.   It simply does not deliver enough of those ‘ideal’ sub patterns because  crowds of traders’ behaviors and ‘feelings’ about pricing are not sufficient equivalents of broader collective behaviors / socionomic waves... ESPECIALLY as time frames shorten... (ie waves may appear to ‘fractal’ down ... but they really don’t.)   If you’re going to use EW to trade, probably the most important point you can acknowledge is that 5 wave patterns are EXCEPTIONS to normal trading crowd behavior ie  the best thing a 5 wave pattern indicates is that corrective patterns will soon resume.  I’ve described it differently in other posts*  ... but basically, at any given point in time it is possible to reasonably project that ANY freakin wave ‘count’ / pattern will enfold.   It is just as reasonable to project that a nice 5 wave completion will go on to a nice 7 or 11 or 17 or whatever wave count as it is to project that the market will now have a ‘trend’ change.  At the end of any nice 3 wave corrective pattern, either projecting a huge 5 wave pattern unfolding in the other direction or projecting a long flat congestive pattern or another 3 wave correction pattern... or... all are equally reasonable.  Or, a pretty wave 1, 2, and 3 doesn’t not mean a pretty wave 5 will unfold.  Ie it’s just as reasonable to count it over and project that the next sequence will be corrective or a 5 wave impulsive move in the opposite direction. etc etc       ... to get back to the unanswered question - So what do you propose as an alternate? Long ago I read Hurst.  In a short section of his book he mentioned it.  It didn’t sink in.  Then one day it really hit me.  There is no Elliott wave sequence or any other ‘technical’ price pattern that cannot be better explained via ‘summation of cycles’ ...   * fun example can be seen by searching for 'trading chaos by bill williams' thread on t2w ... TL is so special we don't even allow links to other trading forums? ... other snarky EW comments at http://www.traderslaboratory.com/forums/topic/7555-do-you-use-the-elliott-wave-to-trade/page/2/?tab=comments#comment-146022      
×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.