I have deliberately avoided this pair ever since the wave 3 of V ended believing that the ensuing wave 4 would be extremely difficult to figure out. Why? Because this pair is SO VERY overbought on multiple TFs and there are so many traders looking for the top here that it would be a absolute MESS! I has warned my private clients to STAY AWAY from this pair until the picture cleared up because I expected an extremely choppy sideways market to develop that would be chaotic. That's EXACTLY what we got! So if you were wondering why I had not posted on this pair recently, that is why.
But now, the picture is coming into sharp focus. There will be a breakout soon and when it happens, it will be explosive! But be careful! The top IS NEAR! Exactly where, still can't tell but it could be around the 1.34600 level where there is a .618 retrace of the overall major trend looming. Here's my 4Hr Chart that is showing the wave 5 wave count and also the breakdown of the choppy wave 4 action.
MY TRADE PLAN I will BUY on a breakout of the smaller triangle and hold it up to the .618 retrace area @1.34600 or near there. Then I will get out and WAIT for some bearish price action to signal a beginning of a decline.
*DISCLAIMER: Please keep in mind that I am not giving any trading signals or trade calls here. Only providing my own trade thoughts for your benefit and insight as to my trading technique and style. Please don't ask if you should or should not take the trade or ask for stop loss and take profit levels. Any SL or TP given on my trades are my own I have used for my trade and are not recommendations for you to use. If you are not sure, then you do not have a trading plan for yourself in place. I suggest you make one before you continue to do any trading!
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Do you think your wave 5 could end up being a fake breakout of the wedge triangle to the high only to reverse and fall back down? Anything is possible, just wondering.
adan3ter
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also- do you use the elliot wave indicator built in the software or do you calculate your own waves?
EverythingForex
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I calculate all waves manually. I do not believe in the use of auto-indicators. They are programmed by SOMEONE who writes the algorithm according to their own bias. So how can any indicator show you anything except what the author sees? Yes, of course, the RULES and guidelines of wave theory would be built into the indicator supposedly but it still must rely on an algorithm written and developed by the author of the indicator. Regardless, wave theory is a very subjective analytical tool in that it depends a lot on the eye of the beholder as to the wave count. In many instances, there is not just one correct wave count possible. Even in this pair's wave 4 breakdown, I could've broken down the count a couple of different ways and they would all be correct according to the rules of wave theory. So no, I do it by hand and don't rely on indicators to do it for me. Besides, you'll never learn and truly understand wave theory by relying on indicators to do the work for you.
adan3ter
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got it. Thanks for your time
Willpower87
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Can you please suggest some readings on Elliot Wave theories?
EverythingForex
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If you are completely new to EW, then start with the basics. Read Robert Prechter's "Elliott Wave Theory". You'll find it being given away for free on many websites. Once you have read that and really gotten a good grasp on EW Theory, then you can move on to more advanced material. But you MUST have a good foundation first! I'll warn you that it is NOT easy to understand and you'll probably struggle with it at first. But keep practicing and studying it and you'll get it.
Willpower87
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Thanks for replying! Much appreciated!
I've studied the basic theories. Wondering where I can find more advanced materials to further my learning?
EverythingForex
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Here's a couple of more recommendations:
Mastering Elliott Waves - Constance Brown
Predicting Markets - Charting Elliott Wave, Lucas, Fibonacci and Time for Profit - Jeff Greenblatt
Harmonic Elliott Wave - The Case For Modifying R.N. Elliott's Impulsive Wave Structure - Ian Copsey
That last one by Ian Copsey is a very interesting read on wave theory. He has a twist on using and counting waves that seems very interesting. I'm applying some of his methods in my own wave counts and the results are not bad. But again, unless you have a very good foundation, it's kinda of confusing.