CastAwayTrader

Bitcoin - easy money is made, now its time to get cautious

BITFINEX:BTCUSD   Bitcoin / U.S. Dollar
On 8 February 2019 I showed you a bullish declining wedge and announced an upcoming rally.

On 14 February I showed you another bullish wedge and said that we gonna get rally to 4,000.

Today, after 30% quick gain off the bottom I want you to cool down. I am still bullish on Bitcoin .
But we got wave i up of a larger wave ( c ) up. We may get now a pretty deep corrective wave ii down targeting 3,600.
Today I sold my LONG position and switched to a waiting mode.
If we get a deep correction I will reload it again. Do not expect it to drop overnight. It may take 2 - 4 weeks to form a nice a-b-c move down setting up for a bigger rally in wave iii of ( c ) up.


Comments

How can be your wave 1 an abc? An impulsive wave is made of 5 waves.
+1 Reply
Coinamic Coinamic
@Coinamic, anyway, I totally agree with your scenario, I have the 21-22 the date of a correction, and the 3-4 of March the beginning of a new wave. Good job.
+1 Reply
@Coinamic, you are right, the classic Elliott Wave theory proposes that every impulsive wave is subdivided into five waves of smaller degree where waves 1, 3 and 5 are also subdivided into five micro waves of one degree lower. I used to practice the classic version for several years. Then I came across a modified version of the Elliott wave theory which is called Harmonic Elliott wave. It also recognizes a five wave fractal as a backbone of any rally or drop. But it acknowledges that all the five waves, 1,2,3 and 5, are subdivided into a-b-c.
The main problem with the classic version is that those perfect five waves do not happen often. And when the final wave 5 either up or down gets subdivided into a-b-c the classic theory calls it "truncation". As if your boss told you to accomplish a task and you perform 66% of what he said. And when he gets angry and asks what the f...k you tell him, sorry, man, I truncated your task. My main approach is to catch bottoms and tops moving from weekly to daily to 2 hours then to 45 min and finally to 5 min charts. When I followed the classic version I got burned many times. Because I was taught that we are supposed to get the final micro five wave move to complete the structure. And after 1-2-3 it would reverse leaving me behind mumbling something like: "I expect one more low".
Then I happened to watch a pro trader who was tracking the same structure as I did but he bought that 3rd micro wave not waiting for 4 up and the final 5th down. And then I was amazed to see that the guy did nail the bottom!
So I asked him why he did that. And he referred me to that modified version of the Elliott Wave theory.
Before you say its weird let me remind you about so called "leading diagonal" under the classic theory. R.N.Elliott saw many cases when price kept moving higher but he could not get five waves out of those moves. So he suggested a compromise or exception. A five wave fractal where each wave including 1,2,3,4 and 5 all are subdivided into A-B-C!!!
These are two main problems of the classic theory: truncation and leading diagonals that both contradict the main body of the Elliott Wave theory.
Let me give you another reason why the modified version of the Elliott Wave theory is much more efficient and precise in trading.
The classic theory says that wave 3 can not be the shortest wave in five wave u fractal. This is all we are left with! And folks keep coming up with weird fractals where wave 1 is longer than wave 3. By the way I have never seen such a garbage count under harmonic version of EWT. The Harmonic version directly says that you can count any wave as wave 3 only if it stretches to 176.4% of the wave 1.

Check the course teaching the modified version on my web site www castawaytrader com/education
+1 Reply
Coinamic CastAwayTrader
@CastAwayTrader, good good, I like what I read. The only thing is that if BTC is making a leading diagonal, normally the first wave is an impulse wave made of 5 and the rest could all be made of ABC´s, at least that´s what my experience tells me. In the other hand, ETH is clearly making a symmetrical triangle in a form of ABCDE. Both currencies doesn´t need to make the same pattern at the same time, but given that ETH is printing a clear pattern, and BTC made the first wave as an impulsive wave and the second as an ABC smaller than the first one, makes me think that BTC also could be making another symmetrical triangle in a ABCDE pattern, which finally ends in a fake out of the wave E and a hard dump.

When I draw triangles, I don´t use candles as they are under wicks pressure, I use lines, just see how bitfinex made tonight a brutal short squeeze. Have a look at my charts. Btw, I´m short in ETH from 150. If this plays out, my ETH target is around 115.



Reply
Coinamic Coinamic
@Coinamic, finally we will know where the next wave up is going depending on how low this wave down goes. If the price touch the bottom of the triangle, chances that this is an ABCDE are extremely high.
Reply
@Coinamic, If you read books by Elliott or Prechter you will see that all the waves inside the leading diagonal are suppose to be subdivided into a-b-c. The leading diagonal can't have wave 1 structured as five micro waves
Reply
Coinamic CastAwayTrader
@CastAwayTrader, you are wrong. In a leading diagonal waves 1,3 and 5 can be corrective or impulsive.
https://ewminteractive.com/recognize-leading-diagonal-pattern
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@Coinamic, that's a good example why I switched to Harmonic Elliott Wave. It just doesn't have such an ugly pattern. It doesn't recognize either leading or ending diagonal. Originally R. N. Elliott discovered 3-3-3-3-3 leading diagonal. Which can make some sense. Then Prechter said he discovered a 5-3-5-3-5 alternative. Give me a break, OK? It's not consistent anymore! There is no value in a theory which keeps introducing new rules that contradict directly rules announced by the founding father. First Elliott said wave 4 can't break the low of wave 2. Then he said it can't break top of the wave 1 up. Then he said it can break the top of wave 1 up in the course of leading diagonal but all waves have to be abc. And now Prechter says waves 1,3 and 5 can be subdivided in fives but wave 4 still can violate the top of the wave 1 up. Hew does not have exceptions while it does have more clear rules. The classic EWT is dead
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I hope you guys followed my advice not to play long BTC over 4,000. This morning we got the first leg of a corrective wave ii of ( c ) of ( i ).
Read my latest update:
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Now you're making a lot of sense, :-). Completely agree- nice job.
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