So it is taking its time - but its getting there. With the release of some good data, AUDUSD heading north and it was just a matter of time with the technicals coming into play. We have:
1. Bearish Gartley forming with the perfect 61.8 fibs in play - this is the green one with almost a 2:1 risk reward of 80 pips of potential profit at 1st targets of 38.2 fib
2. In the long run, maybe going into end of next week, a potential Cypher pattern forming which I will be pointing when closer to completion but currently looks like the pink drawing.
You could note that currently in the 3rd Elliot wave so wait for the Gartley to stretch a little bit more before shorting :)
Comments
Khan
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Patience is the key. +60 pips if taken short at point D. However, guys looking at PA like myself shorted close to the 905 area and so a good 100 pips. Taking 1 lot off just now, and changing sl to break even on the 2nd lot ;)
dojitrader
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Thanks for your reply.
Your chart and comments raise a couple of interesting questions in my mind.
What is considered the definition of "perfect" as you refer to the .618 fib. which
your chart shows as .726 and .701 and at what point beyond the .618 does a Gartley
break down and become invalid. For me, a perfect .618 would be in the range of .60 to .64
I guess I'm just to Damn picky with the definition of perfect.
Second, when you said C to D was possibly a EW 3 I immediately wondered if that is possible
for a Gartley to succeed as a 3rd wave as they are impulsive (not corrective) and commonly extends,
with 5 subdivided waves, into the area of 1.618 of wave 1. In this case that's up around
the D point of the Cypher. Which raises all shorts of questions about Cyphers and there potential
success when encountered with 3rd waves
Think I have lots of testing to do over the weekend.
I'm thinking that identifying a 3rd wave would save taking a loss for Gartleys and maybe Cyphers
as it seems to me, at first glance, that these patterns are at there best when found in corrective
a-b-c w-x-y zig zags. Maybe even larger flats.
Your comments and charts have given me lots to think about and a lot of testing.
It's probably going to take some time.
Wishing you lots of pips in 2014 !!!!!!!!!!
Khan
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Thanks for the wishes Doji.
So when I say perfectly Gartley, I mean in the sense of perfect ROEs (rules of engagement) - for me (and many others), a perfectly Gartley set up is AB = 61.8 of XA (but not more than 76.8), BC = 61.8 of AB (but not more than 76.8), CD = 1.27 of BC. So according to that, the retracements are hitting the fibs I (we) want just enough and not more.
Agree 3 EW is impulsive and not corrective, but this impulsiveness is measured by the relative amount of time it takes to form compared to the 1st wave. As I see AUDUSD chart right now, I would say I was right in thinking a possible 3rd EW last night, however, retracement on AU right now makes me believe we are still in a corrective 2nd Wave for now, and expecting a 3rd EW shortly. Also, 3rd EW can not be the shortest - so whether it reaches point D of Cypher is another question, but measuring 1st wave, our Gartley completion would make 3rd EW not the shortest, and so I would think if 3rd wave ends there, corrective 4th wave would be the Gartley hitting targets?!
dojitrader
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Of course,
} the problem with wave 3 is that you don't know it's a 3, for sure, until it's complete{
}structure of wave 1 and 2 can often leave clues , but that's another chat{
Anyway,If I understand what you're saying and I can explain my thesis a little better -----
"If" A to B is wave 1 and you measure that length from point C (end of wave 2)
On a 1 to 1 basis you get the area around point X which is far beyond the standard
entry of .786 for a Gartley.
"If" the potential wave 3 extends at the common length of 1.618 of wave 1 you get
the area of point D on the Cypher. So, my contention is that a Gartley with always
fail if you've encountered a wave 3 and if you can identify that before hand you
have saved yourself an unneeded loss.
you're right that wave 3 cannot be the shortest or it's not a wave 3 and that's my
contention: a valid wave 3, even a 1.to 1 wave 3 ratio would not lead to a successful Gartley, perhaps
a Cypher though . . . depending on the placement of stops.
Khan
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just hope right now you took the long and are as happy as me :) taking profits now and will look at PA for shorting option when cypher completes
dojitrader
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I'm confused ~~~~
You published a chart that shows a bearish short, yet, you say I should have profits with a long
position ? there are no entry and stops shown for a long position, so I was wondering where
you entered, the stops and why you choose that particular time and place for the long
entry.
Thanks for your thoughts and insight !!!!
HatZ
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it's scheduled to hit an RM point feb01 04:00 GMT.
It's possible the reversal will happen during that time.
dojitrader
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would it be possible to identify the .618 fib is based on what high to low ?
and, what wave is the 3rd you say is EW ?
Thanks for your thoughts !!!!!1
Khan
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Gartley is the green one. so high to low from the pnik B to Pink C - which is actually the Green XA - 0.8886 to 0.8657.
I believ we are in the 3rd EW just now. From Green point C upwards (my opinion)