I am merely cutting & pasting a discussion I posted on the Predictive Analysis/Forecasting Room (https://www.tradingview.com/chat/#5eHLst6YxeVqGlaO). As a student of the market, I have to preface here that I have my own methodology, and that I have relied on my own model to define particular R/S and reversal levels.
However, what I am putting forth here is a simpler way to define a potential S/R or reversal level using a Fibonacci forecast level from a higher timeframe, and then returning to the smaller timeframe of interest, and catch the S/R or reversal-based swing trade using the amplitude that is offered from the higher timeframe.
In this example, I used the 0.618-Fib from the DAILY and returned to the H4 chart where it is clearly shown.
I then used the T.S. Hennessy wave count methodology, as outlined within the chart, and define that area of reversal with some satisfactory accuracy.
What then ensued was to simply use the SMALLEST Fibonacci reversal value (i.e.: 0.382) to catch a counter-trend opportunity.
The chart will clearly demonstrate that this is exactly what this method would have allowed you to do by merely calibrating your trade first at the DAILY for a likely 0.618 price reaction, and then down to the H4 for a definable limit to that price reaction.
Whether price decides to go further down or not is really irrelevant in this simple strategy.
As I post this, please give me time to cut/paste the recent discussion I posted regarding more specifics about the occult geometries I employ within my own, albeit more complex, methodology.
I hope that you will appreciate this methodology for its simplicity and for its ability to open your mind's eyes to other, alternate and quite simpler way of trading. I am a passionate student of the market, and my background, which I offer in the discussion, will help clarify the sort of mind bending processing that may go into trading.
If you are interested, then I suggest that you turn to your next level of trading complexity by learning from the likes of Constance Brown for more complex and occult geometries, from Ashraf Laidi for a global understanding of Inter-Market Analysis. And if you liked this method or the material I am offering here, feel free to share around. Please, leave credit where credit is due.
Predictive Analysis & Forecasting
Alias: 4xForecaster (Twitter, LinkedIn, StockTwits)
Signal Service or Private Course - Contact: MarketPredictiveAnalysis@gmail.com
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I get similar values for S/R based on volume over time and price studies.
I had noticed they match fibonacci retracements in the same timeframe...guess the fractal nature of the markets is truly evident now.
Will have to get the Hennesy book now, and maybe some Constance Brown. :D
I thought I should share a bit of how I approach my trading plan whenever I look at a chart - First, let me say that I am a visual trader, that my undergraduate degree was a visual and numerically-driven field (Architecture at the University of Kansas, Lawrence, KS, USA) with a specific interest in numerology and occult geometries; and that I am currently working as an ED Doc, constantly running through risk management, quality assurance driven algorithm sourced from evidence based medicine. So, perhaps this will give you some insight as to how pragmatic and reality-based I base all this crazy-appearing trading methodology ... since 1997 when I entered medical school at the University of Kansas Medical Center, in Kansas City, Kansas.
Now, enough of introduction, and off to the chart.
Here, this BTCUSD, H4 chart appear a few days ago with zig-zaging price oscillation that were already well developed. In fact, we had defined everything you see in here (except that for roman numerals, I had instead the double-parathesised numbers, which I changed for visual simplification - Remember, I'm all visual).
What I started to look into was repetitive patterns. Now, I know that my model is giving me a bearish direction, bearish targets and an overall bearish chart, but I want to anticipate the market's motion.
In other words: What is coming next, which seen from its completed form, would make sense retrospectively, that I could have anticipated.
Or, to say it simpler: What is it that I can see now that I would be seeing in 3-5 days from now?
What I know after studying so many charts, is that all price action makes perfect sense. And I assume that you have experienced this yourself, when you look at Fibonacci levels, and look back at a M5, M15, H1, H54 or even a daily chart, and you simply glance in the depth of your own imagination - completely in awe - projecting how glad you would have been had you done this or that - sounds familiar? If not, then truest me, people like me abound, and some decide to learn all there is to learn about simplifying price action and devise a reverse-engineered way of trading from the moment that would have otherwise been the product of an envious imagination after all is done and too late.
So, in the case of this chart, I simply look at repetitive systems, or whole geometries where price recreates a fractal pattern. Now, we know that Fibonacci's measurement assure the very nature of fractal forms by merely preserving the expansions of price along multiple of the Golden ratios, such that no matter how far price expands or shrinks, the inner coefficient that allows growth and contraction of the market's anatomical parts remain a function of that coefficient. At the end, it's like looking into a cauliflower.
Here, the same principle applies. If you look at the I-II-III-IV-V branches, you might notice that:
1 - The start of Wave-I and the speculated end of Wave-V is incomplete, but stands on a symmetrical projection
2 - The correction between III and IV is also speculative, and rotates around an A-B axis
3 - S1 and S2 are mere projection of what would otherwise be known as a symmetrical AB = CD pattern, but here, they are used as the intrinsic corrective points of a Hennessy-based wave count, where C terminates at IV
4 - Point II represents the origin point of a lower ddegree numerical one in parenthesis, or simply (1)
5 - (1) to (3), (3) to (4), and (4) to (5) are projections over the higher degree just defined as I-II-III-IV-V
6 - And finally, that an even smaller degree, marked in parenthesis as (i)-(ii)-(iii)-(iv)-(v) creates a final and complete smaller version of what is speculatively projected in (1)-(2)-(3)-(4)-(5) and I-II-III-IV-V.
So, the strategic question here, in terms of game theory (which Wikipedia defines as: "... a study of strategic decision making. Specifically, it is "the study of mathematical models of conflict and cooperation between intelligent rational decision-makers", the solution concept (i.e.: the formal rule for predicting how a game will be played, which in this case is the assumption of fractal geometries and Fibonacci-paced price expansions), we are interested in whether price will indeed rise to the level of IV/C/(4), which is the 0.618 projection from the II/ii to (v)/(3) impulse, or whether price will simply repeat itself at this higher degree compared to what it did from the inner, complete smaller-degree pattern expressed as (i)-(ii)-(iii)-(iv)-(v), where the similar point (iv) rose to 50% relative to its own II/ii to B impulse.
In other word: Would current price rise? Would it rise to 50% as pattern by a smaller fractal geometry of lesser degree? Or, would it rise to 0.618, submitting to Fibonacci's widely expected reversal level of its Golden number?
I pose the exact same question on a trade I initiated today in the E-Mini S&P500 (ES_U14), as shown in this chart, where the idea is to seek out a slightly more complex solution concept, which is based on the geometry of T.S. Hennessy's count (an alternate wave count to Elliott Wave) - Here is the chart:
To some extent, I have approached the $GBPUSD with the same gamy concept, drawing a limited upside (blue arrow suggest a resumption at less than 0.382 level, on the basis of the information available about the Pound, and the structural elements immediately available to sight (significant structure low that was the springboard basis for a historical high to 1.70853, so likely that this former support would now act as a major resistance - major assumption, here, but one worth bearing in mind in technical analysis) - See $GBPUSD chart:
Here, by way of illustration (and at the risk of boring you with repetitive details), I have run the same solution concept using 1) Hennessy wave's count, 2) simple symmetries and 3) The knowledge of bearish bias in the other $BTCUSD exchange (i.e.: Bitstamp vs. this Btifinex exchange), where the bias turns to a down-trend expectation; all reinforced by: 4) the predictive model, which remains bearish at this level.
Here is the BITFINEX chart:
In this particular case, I have really TWO conflicting biases:
1 - The model calls for decline, however, it has done so many times before, yet it would let price rise a little, as if to let it gain moment, as when one would take a few steps back before jumping over a challenging distance.
2 - The BREAK of SYMMETRY, which is a segment I have been looking into recently, which would tend to define what the A-B-C corrective wave of a Hennessy count would tend to complete. Let me re-draw the chart with the points I am talking about - all in bright PINK - See chart:
Now, let me remove all the "pink stuff" and return the chart to its original state (I do this, because the brain can be a fool's tool which will latch onto some visual information proximal to reality and then able to make it its own reality ... I don't want these pink lines to act as something that would prevent me from thinking up other plausible scenarios, right?
Here is the chart as it should be - Bitfinex-H4 Chart:
Now, what I know from one of my bias is that Hennessy count's geometry will require Wave-B of a C-Wave (which is what this entire top-left to bottom right speculative price action is supposed to represent in a higher degree and larger timeframe) to fall below the point marked as (5), which would have been the ending level of Wave-3 in our recent pink-marked chart, then causing an internal Wave-C to retrace all the way up to complete the signature 4(c).
This signature 4C is quintessential, as it would mark the start of a major, highly profitable impulse. In essence, it would give the counter-trend trader an amazing starting point, if it was known well in advance.
Well, this brings us back to our original chart, the BTCUSD-H4 in Bitstamp exchange - Here:
So, now that I have shared some of my geo-based methodology, is this starting to make sense? Is some aspect of the occult geometries coming out and reach a slight degree of rational thought into your mind's eyes?
Of course, all this is part of the risk management: Looking at all possible moves (assuming that ALL moves are stuck by the pacing of Fibonacci numbers, just like all the piece of a chess game are limited by the rule of how much and where they can move), then ranking all into probability actions, based on the most immediate state of the game and the successive actions that preceded the state (here, we can tell that waves I, II and II are complete, that they moved in Fibonacci relations to one another, and that they have defined S/R levels, and that as a whole system, they have defined a bearish move with lower-lows and lower highs - This alone should help the structure-based trader to infer a lot of information.
If this is too way out there, then may be this is a level of thinking process that represent your next level of learning. If this is right at the level of thinking, or it's starting to tickle that part of the brain needed more ingestion of this simialr stuff, then look into Constance Brown's books. If you think I'm out there, well first I may not ahve done good enough a job to lay out the rational steps of my decision making process (which is really how I approach most the trading decisions, mixed with fundamental analyses produced by smart guys, such as Ashraif Laidi - He wrote one of the best book on Inter-Market Analysis, worth reading in order to understand how bonds, stocks, futures, and Forex influence one another through the flow of orders (and now the influence of crypto-currency, which is NOT discussed in his book, but if so much is invested in it, then so much less is removed from another market as well).
In any case, thank you for reading thus far
Predictive Analysis & Forecasting
Denver, Colorado - USA
PS: Feel free to cut/paste parts or whole segments of this "monologue", with appropriate reference. It's always nice. Thx, David.
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(Source: Predictive Analysis & Forecasting Room: https://www.tradingview.com/chat/#5eHLst6YxeVqGlaO )
This is a game theory way of casting oneself in the future, narrowing down the ways which we understand are limiting to price action, and looking at the most probable motions based on these limitations.
For instance, if you take ONE pawn and place it in the middle of the chest board, much like a pixel on a screen, you will agree that if cannot move in any other way but forward. Given any another piece, say a knight, a bishop, a queen or a king, they each have their own privileged motion, one successively more complex and flexible as you rise up the hierarchy level.
Another knowledge which you would have is intent.
In the chess game, the pawn is the only one piece of the game which cannot do anything else but move forward, one square at a time, except for circumstances when it is allowed to take out an opponent's piece. However, any other piece of its side can roam about the pixel-like field. But truth is that it won't simply move around. The player has several motivations subordinated to the need to win the game, and the lesser of these is to move any of the piece to the starting line of the opponent, so as to regain a piece back that would have been lost during the game. But the net intention here is to move in one and only one NET direction.
Similarly, in the price action, there is only one NET move, which is time-based, from left to right, with amplitude to the up/downside that remain the only variables. So, all there is to guess here is not how long it will take to move to the left of the screen, but to understand by which manner it will move up or down, understanding the limited ways in which price can "ambulate".
In the explanation of the trading methodology, I have stated that any and all motions throughout the price field can be securely measured using simply Fibonacci retracement values, retrospectively.
This retrospection is what is key, because the game theory I employ is motivated by knowing ahead of time what that end-level, up or down, would have been, had we been standing at that retrospective position, which is yet to occur, hence this prospective retrospection.
While it may appear abstract and vain for some traders, I have done this quite a number of time as to be maddened at the profits that could have been gained had I used a simple measure to understand what ended up being most evident and self-explanatory from a retrospective standpoint.
All my research over the years has focused on defining what every technical analysts kept on telling me through various literature, that I could not possibly define, much less devise a way to define, a reversal level in such a random market. I now know that I can respectfully disagree with them, and that the market retains a way to retell the way it ventured through the chess board, in a way that would be telling of its future ventures - In a way, every body has a gait. Everybody leaves footprints.
I later took the time to revisit the site when I was re-contacted by their (obviously very effective) marketing service. With the amount of knowledge I had accumulated, I decided to see how much correspondence existed between my research and the EWT. Then, I started to look at ONE particular area, which reflect my area of study, which is looking at mid-impulse geometries. In Elliott Wave, this means looking at the behavior of the 3rd wave in impulses, or the behavior of the B Wave in corrections.
Then, I started to read more and more about it until I came across this Hennessy "heresy". Truth is that his wave count was EXACTLY similar to a similar wave count I had discovered, which I had named "House Cleaning". The proportions are well defined, and there is a very particular level from which price is almost certain to move out and away in the forecast direction.
The similarity in Hennessy's count resides in the development of the 4th Wave, particularly the conclusion of 4C.
4C, once done, will revert past the spearheading of 4B into the unknown, as it forges into new territories. The rule defined by Hennessy is to look for 4B as it heads towards and carves out new advances. But what I have focused on is the counter-trend of 4C in its development and attainment of levels OPPOSITE to 4B, such that I would be able to apply my predictive/forecasting model and define THE point from which a new departure towards and past 4B would occur.
So far, I have not been disappointed. As I share this Hennessy wave counting, I also realize that it might not come to the trader;s minds' eyes as readily as it would across many traders. As a visual trader and thanks to a visual education, I can say that certain things come to sight that remain obscured to others. So, when it comes to imaginative sighting, a certain level of brain twist and neuronal conditioning might be needed for the literal, non-visual person - I know many of my friends who can't see a duck in the cloud when it's all apparent that a could is shaped into one thing or another.
However, in the case of the Hennessy methodology, understand this visual handicap which be affect one trader or another, I also sought to devise ways to ascertain as objectively as possible what I was seeing, placing myself in the position of the "visually-impaired thinker", so to speak.
This was a relatively easy proposition, as the author himself had devised his own visual rule:
"If you can see it, it's a C"
This means that ALL C waves stand out by the mere fact that they are defined as a drastic outshout of the impulse. What I defined with more words and hopefully to lessen the possibility of being wronged by bake moves, is based on the following:
1 - C-Waves are drastic moves that point opposite to the underlying direction
2 - In a DOWN-trend, ALL C-Waves will point UP
3 - In an UP-trend, ALL C-Waves will point DOWN
4 - Given a trendline and a perceived C-Wave, ALL C-Waves will break across that trendline
5 - C-Waves will terminate by or near the prior ending of Wave-2
These are my rules, based on observations and any variations thereof would be immediately cast under doubt that what I am seeing is what I need for it to be a valid Hennessy count.
OVERALL, I can say that I am very pleased with the outcomes. However, remember that the outcome are based on a compilation of predictive/forecasting model definitions (i.e.: I predefine a probable level of new and future R/S via the quantitative targets, or reversal via the qualitative targets), and keep these levels in the price field. As price unfolds, I look for ways that the Hennessy methodology would be right from a prospective retrospection method, which I have just discussed above.
I hope this answers your question.
$BTCUSD moves on to potential resistance at 556.42
via @tradingview | $BTC $USD #bitcoin #litecoin
Your chart does a good job at detailing Wave 3 where it is placed. The anticipation of all points where price has yet to attain are also defined relative to a Fib matrix, which makes sense. However, the overall task is to leave all of the possible Wave-5 termination point way lower down. The one that you drew below Point-3 in red should instead be taken out of the field and "stored" much lower down in the right lower corner of the chart, in anticipation of a renewed wave down once Wave-4 has completed.
Looking at your indicators, you have chosen to use RSI-20 at the close. While there is no problem in using any RSI value at any particular level of recent price action, I recommend that you use a slightly more sensitive RSI, so that the current "filter level" does not leave sensitive information out of sight. As you already know, the higher the RSI, the less sensitive (sensitivity being the detection of any signal, both correct and false signals), but the more specific (specificity being the ability to detect the right moment to provide the right signal) it becomes. I particularly remains adherent to the original set-up, which is at a RSI of 14, but I have set it so that of ALL recent price activity (i.e.: open, high, low, and close), it only filters through the relevant activities AFTER price had commenced its motion per candle, hence my deliberate choice to use the (High + Low + Close) / 3.
Feel free to post any other chart as you'd like, if you do not mind me adding a few commentaries on it. It's just opinion, and nothing that should be construed otherwise. Once you post a chart, although a link is acceptable, I would try to post it by simply pasting the link into the right upper corner window of the frame in which you time (see the small square icon with a wiggly line). This will allow to add your chart visually into the discussion, as I just did by copying the link and posting your chart below - Let me know how I can help.
Seemed to pinpoint waves ok-ish in conjunction with the other tools.
I haven't done this in a while, since I went on to focus on volume per price and more of an intraday style, but I'd like to go back to larger moves.
I'll keep trying and see where the demoing takes me. (back to square one heh)
Thanks again for your time David, you're doing a great job enlighting people with your insights.
The website is one where I also have a membership of several years, called VolumeSpreadAnalysis.com (link: http://www.volumespreadanalysis.com/Tom%2520Williams.asp , which leads right to Mr. Tom Williams' profile, the person who has carried the tradition of this method over decades, and from whom I also received private lessons. Here is the site where all the information resides, but will require a membership. hey have been VERY generous with free introduction periods. Hope you enjoy it.
$BTCUSD: Altern. #elliottwave count & occult geometries: Reversal @ 563.27 per module:
via @tradingview | #bitcoin
As per tweet:
"$BTCUSD: Altern. #elliottwave count & occult geometries: Reversal @ 563.27 per module"
However, this is short of the predictive/forecasting model, so this is a great opportunity to pit the two against one another.
Have a fantastic week-end.
Buckle up, slow down, wear your helmet - Labor Day week-end spells only one name where I work, so don't become a stat.
I have a question.
Do you think we break out from this 500-level to the upside and visit your target 563.27 (Bitstamp), or do we break out to the downside first to for example 0.618 Fib level from Daily chart, i.e. 471.00 Bitstamp, and then have a relief rally to the upside and visit your target 563.27. So, in your chart, the retracement in module 2 (green) goes a little deeper, more like the other module-2 (blue box).
Thank you for your charting. I learn a lot.
Have a fantastic week-end, for you too.
Per model, that Point-1 has an incredible bearish entrenchment packed in it ( = 534.14).
So, although I have left the arrow pointing towards the 563.27 (which is derived NOT from the model but by the occult geo-analysis I have laid in the chart - explanation coming in the future), I remain guarded unless the condition (price > 1) is met. But this would be in the most immediate expectation.
In the intermediate (S/T), I would expect some further unwinding to the downside, simply by imposing Hennessy's count in the field.
In the long-term, the BEARISH targets remain intact and in force per model.
Hope this answers your query.
Have the most wonderful and safest weekend.
1 - TG-Lo or TG-Hi have the LEAST level of probability of getting hit
2 - If and once TG-Lo or TG-Hi gets hit, it carries the HIGHEST probability of a market reversal (not just retracement, but actual reversal.
Reversal is defined as a market turning around to carve out new highs/lows in the opposite direction, past the start of the impulse that led to TG-Hi/TG-Lo validation.
Following is an example illustrating the reversieffect of TG-Lo/TG-Hi:
Point is that the model prints a number on two positively correlated currencies/bitcoin with a separate exchange, and if it projects a significant discrepancy in the data, this is cause for me to either question the model or simply believe that there may be some uncoupling of the two occurring in the future.
You got my attention on this, because it did not even occur to me that the levels are significantly different in their targets.
Be sure to call my attention if and once price get there, because this is a very intriguing price differential in such two tightly correlated crytpo-currencies.
Excellent notice, and thank you for bringing this up in here.
First, these used to be my favorite, but I was never able to see them, mainly because the construction had to rely on "backward" slanting projections of the AB and BC lines, which HAVE TO remain parallel to one another.
I cal it "backward" in its construction, as it stands OPPOSITE to the symmetrical AB = CD geometry, where the AB slants forward.
Here is a link from Kor, from whom I used to follow the patterns via his pattern recognition software:
Also, his site contains a wealth of information on Fib-based applications to profitable trading.
Let me know what you think.
In the case of your chart, I would hesitate to trade this, specifically because the slope of AB differs from the slop of BC. This tells me that these price action segments are under SEPARATE controls, and this may or may not arrive at the desired product, which in this case would be arriving at a successful RALLYING ABOVE Point-C.
Whether it ends up going there or not is not as important as whether you chose the risk of a pure pattern or one that presents with inherent "defects", especially if this choice leads to different profitable outcomes.
Is this answering your question?
I had seen the reversal and continuation page ( http://tradingarsenal.com/121-pattern/362-reversal-continuation-121-pattern.html ) and thought it looked remarkably like the current formation on Bitfinex. Also with it referring to this being a running correction and our anticipating BTC moving up to complete the 4C it seemed to fit. But once I overlayed the XABCD tool, some doubt crept in my mind.
In the end, I guess this would be more of an ascending triangle with price trying to break through the 485 level? Is it reasonable to expect a move up to the complete 4C, or are we due a further move south?
This is a M15 chart analysis, so not as certain as the H4 levels where I apply most of my attentions, but this has a good chance of getting there - Here too, nothing is 100%.
Feel free to show your trades. I am curious to see how you handled it.
$BTCUSD continues to march along its bullish baseline trendline:
via @tradingview | $BTC #bitstamp #bitcoin $USD
(Source: chart dates back to 03 APR 2014)