TRADE THE WAVES. TRADE THE PATTERNS: July 2015

Friday, July 31, 2015

Elliot wave theory shows how human psychology is reflected in the charts . It is a roadmap to how traders behave or respond to market events. This phenomenon is shown in clear patterns, corrections or trends.

The last update on Gbpnzd showed a comprehensive all-encompassing market analysis that described the possible direction and resting zones to watch out for. Read the analysis titled GbpNzd. There were four probable patterns that price was expected to form.

Elliot wave theory is the most complete technical tool to understand the position of price in the framework of the market.. It clearly tells us the degree of any trend and correction within a market structure; when they start and end and what to expect afterward.

UsdCad was my favourite currency pair. I have traded almost all the patterns in between for a long time. It's count was so easy for me and at a glance, I saw what price was saying in every move and turn.

At the beginning of this year, I started with a bearish bias though with a long term bullish sentiment. The article was titled UsdCad Analysis for 2015. I forecast a rally in price to 1.35 and above, but after a dip to 1.0 region.

Below is an excerpt from the article.

"In the long term, this current impulsive move from 2011 is probably part of the ‘C’ leg of the projected zigzag corrective pattern. The ‘C’ leg should take us to 1.35xx and 1.46xx in the years to come, probably a period of 3-4 years"

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GbpNzd: It's As Simple As That

Look at the weekly chart of GbpNzd below, what can you see?.

The sell off from 3.7 to 1.75, a 19500 dip from 2000 to 2013. Is it a price movement in correction or motion (trend) ? Is the subsequent bullish move from 1.75 a correction of the bearish trend or continuation of the bullish trend?

Watch Out For EurUSd

The last update I did on this currency pair was titled How to trade the elliot wave pattern when I wrote about how to follow price actions using elliot wave analysis and trading clear patterns that price usually respond to.

Prior to that, there was an update titled Eurusd in a bearish net , which was immediately followed by a fast bearish move.

How To Exit A Trade With A Pattern.

AudJpy was one of the markets doomed for a sell off after an analysis, based on elliot wave theory, that Japanese Yen was expected to strenghten across board, which means that Yen pairs were expected to fall..

Yen Pairs fell sharply days after the forecast.

AudJpy's decline from 97.399 was expected to be in 5 waves trendy move.

Wave 3 of this impulsive move tend to be in progress after the completion of the first two waves.

On 8th June, I posted an analysis here titled JP Porgan as caught on elliot wave on how I expected JP Morgan stock price to move in time to come.

I had two scenerios. While I favoured the first, I kept an eye on the second. i wrote about the favoured analysis below.

The analytical chart below shows the dip of EurGbp from 0.98 to 0.695; a dip of more than 2800 pips in a period of 5 and a half years.

Prior to this dip, there was an advance from 0.566 at the beginning of this millennium (2000); that was more than 8 years.

It is clear that price reversed from 0.98 and still going southward. Few questions that might cross our minds include the following:

1. Is the bearish dip a trend reversal or correction?

2. If it's a correction, where and how could it end?

On 31st May, there was analysis here titled Multi Face Analysis of the Usdcad.

After the analysis, I put a sell order.

I was so sure that I was selling after the completion of a long term flat formation on the weekly chart which was confirmed by the 5-wave impulsive move.

Price was expected to break below 1.90 in a motive mood.

Short Term Analysis of Cable.

After a long move downside over a long period of time, Cable finally reversed at 1.455 and we are getting close to know how the resultant bullish move could turn to play out.

Viewing the bullish move through elliot wave binoculars, it's clear that the long term bearish move might not have concluded. What the chart is showing us presently is that price is correcting.

I have still not yet found any chart theory or technical methodology that can can be used as a market predictive tool like the elliot wave theory.

Elliot waves theory's ability to distinguish distinctly between a trend and correction is itself a tool which, if well used, builds confidence in a trader.

On 3rd June, I posted an analysis on Yen titled What the charts are saying about Yen.

I Love Diagonals....Euraud!

This trade was one of the case studies of 'trade the pattern and not the count'. I am a strict advocate of pattern trading.

What's my business opening a position when a pattern is not in place?

One of my favourite elliot wave patterns is a well formed 5-wave impulsive move.

A non-overlapping 5-wave decline or advance as discussed by elliot wave theory is my 'bread and butter'.

The chart above was posted when I saw this pattern emerging on AudNzd on 22nd June in the article titled Audnzd Update.

After the completion of this pattern, a correction was expected. It was not surprising as price dipped fast.

The fifth wave of this pattern also formed a 5-wave pattern which allowed me to put a sell entry at 1.1325 with stop loss of 120 pips.

It was a very sweet trade and I closed my position making 300pips as a correction is expected upside.

It was a perfect textbook pattern which doesn't happen all the time. It is a high probability trade, not a perfect one.

It is one of the three patterns I intend to share with the participants of my 6-weeks intensive online mentorship course.

Book a space today.

Cost: #10000 or $70

Call or send sms to me on +2348134820569 or mail me @ forexmaster05@yahoo.com

Note: Only serious and interested people should contact me.

If you reside in portharcourt and its environ, you can book a one-on-one training with me.

Another pattern that will be taught was seen on Euraud. It was another textbook pattern . Read it above.

Thursday, July 9, 2015

How To Trade Elliot Wave Patterns

Elliot wave theory has proved time and time again how effective it could be in determining market direction.

Not only does it have high confident trading patterns to watch out for in any time frame and any market, but does have the ability to forecast market movement.... every bit of it!.

From the super fast tick chart to monthly time frame chart, its effectiveness is superb.