On 14 February I showed you another 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 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.
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
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.