After re-analyzing this pair with more focus (admittedly, I was all over the place yesterday as almost EVERY pair I follow is setting up for some kind of major move), I have revised my wave count. Taking a closer look at the wave (iv) to see where are the high probability turning points, I've also located some patterns as well. There is a possible Wolfe Wave forming as well as a POTENTIAL bearish bat that both may signal the end of wave (iv0 and the beginning of wave (v0. So both patterns are trend continuation patterns.
Be aware that although the Wolfe Wave point 5 is set at the top of the ending diagonal, point 5's in a Wolfe Wave are allowed to exceed the diagonal in a "throwover". Yes, the ending diagonal is also a bearish wave pattern and again, point 5 can be a "throwover".
The POTENTIAL bearish bat completion may also signal where the end of wave (iv) will be and the beginning of wave (v). That would be a very good place to sell.
4HR CHART - Update Wave Count
MY TRADE PLAN I have my SELL orders set at the completion of the bat pattern. However, I will monitor the price action closely as there is a possibility that prices may fall just short of completing the bat before reversing. If I see bearish price action before the bat completes, I may trigger the SELL orders before then as there is a strong possibility of wave (iv) ending around this area. So saving a few pips by waiting for the bat and then potentially missing the trade would be penny-wise but pound-foolish. Again, this is allowed under my trading plan so you must follow your own trading plan. I will usually only short-entry patterns if they are trend-continuation patterns as this one is. I will not usually do this on a counter-trend pattern.
*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. 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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Thanks for the update! Have a great weekend ahead!
EverythingForex
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You, too1 Rest up and be prepared. Next week things could get really interesting!
VincentWhiting
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Hi, thanks for sharing your analysis.
I guess NZDUSD is following similar pattern.
Cheers,
vince
EverythingForex
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I wouldn't know as I don't normally trade the kiwi unless there is a very good reason to. Now that you mention it, I may go take a look and see. But because there is already some very good setups in the majors, there is already more than enough trading opportunities available. I'll usually only go take a look at minors when the majors are idle. Thanks and GL!