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# Potential Rallying To 4C' Per Alternate #elliottwave Count

BITFINEX:BTCUSD   Bitcoin / Dollar
2003 38
Friends,

Feel free to look into these refined rules I have laid down on T.S. Hennessy's Alternate Elliott Wave count. This is something I have spent some time to refine, and in the process, came up with a wave counting process that will simply the wave count quite dramatically - This process is called "Wave Reduction" whose rules can be found in the "Predictive Analysis & Forecasting" Room on http://www.TradingView.com - Here is the link: https://www.tradingview.com/chat/#5eHLst6YxeVqGlaO .

For now, this shot-term analysis and Wave Reduction layout in the chart.

The Wave Reduction have a simple repeatable pattern that is reducible or expandable, as per the fractal nature of price patterns it represents. Hence, the higher-degree Wave-1 contains the modular count defined as 1-2-3-A-3'-A'-B-C-4C-4C', where 4C and 4C' have a specific counter-trend task to accomplish relative to points 3 and 3', respectively. Failure of this task completion signals a trend continuation - Simply see the rule written within the linked discussion/lessons.

At this point, a separate model has defined the following two targets:

1 - TG-1 = 490.03 - 01 SEP 2014

and

2 - TG-Hi = 495.17 - 01 SEP 2014

Looking at the Wave Reduction rule, it appears that 4C' would be tasked to rally to a level corresponding to the primary target, TG-1 = 490.03 - 01 SEP 2014.

HOWEVER, there are levels that will require overcoming, namely: 484.89, which is the structural level where recent bears have repulsed price down to its current lower level.

ALSO, if price fell below 476.57, it would give the market little less chance for a rally to the targets to occur.

At this point, we stand between these TWO structural levels, and we can do nothing else but wait for either of these conditions to validate the analysis.

Cheers,

David Alcindor
David Alcindor, CMT Affiliate #227974
Alias: 4xForecaster (Twitter, LinkedIn, StockTwits)

Signal Service or Private Course - Contact: MarketPredictiveAnalysis@gmail.com
All updates on https://twitter.com/4xForecaster
Thanks for the update. I did have some concern of the resistance at the 495 range, but felt it could overcome this to reach the original TG-Hi (29 Aug) - considering RSI for the Daily and H4 are sitting at 31-32 range with plenty of room to rise. With this, a few questions come to mind:
1. Is there a time-frame the market must conform to in order to complete 4C and validate the strategy?
2. If price was to hit the revised TG-Hi (01 Sep), is the previous TG-Lo (25 Aug) still in play or will that target also require a revision? On my daily chart, I have a target range of 382-351 based on fib retracement.
Reply
DanLaffas
@DanLaffas - Let me answer these great questions:

Your questions / MY ANSWERS:

1. Is there a time-frame the market must conform to in order to complete 4C and validate the strategy?
IN SHORT: NO. THE 1-2-3-A-3'-4C-4C' ELEMENT IS AN EXPANDABLE REPETITION THAT EXISTS EVEN WITHIN THE 1-2-3-A SEGMENT ITSELF, DUE TO ITS FRACTAL NATURE. IT'S BUILT AS A REPETITION OF EVER EXPANDING TO HIGHER DEGREES AND EVER CONTRACTION TO LESSER DEGREES. WHAT I SHOW IN THE CHART IS USUALLY LIMITED TO 2-3 DEGREES, TYPICALLY ONE UP AND ONE DOWN.

2. If price was to hit the revised TG-Hi (01 Sep), is the previous TG-Lo (25 Aug) still in play or will that target also require a revision? On my daily chart, I have a target range of 382-351 based on fib retracement.
IN A WAY, YOUR QUESTION OFFERS A CONCEPTUAL EXAMPLE OF THE FIRST QUESTION. WHENEVER A TARGET IS DELIVERED BY THE MODEL AT, SAY H4 LEVEL THAT SHOULD POINT UP, AND ANOTHER TARGET IS DELIVERED BY THAT SAME MODEL BUT WITHIN A LESSER TIMEFRAME, THESE DO NOT NECESSARILY BECOME MUTUALLY EXCLUSIVE.

WHAT I WOULD LOOK FOR IS A SET OF CONDITION WITHIN SAY M15 THAT WOULD MAKE THE H4 TARGET LESS PROBABLE. TYPICALLY, THIS WOULD BE PRICE GOING PAST A LEVEL THAT WOULD ALREADY BE DEFINED AS A NO-GO IN THE HIGHER TIMEFRAME ALREADY.

FOR INSTANCE, WE HAVE 484.-- AND 476.-- AS THE UP AND DOWN S/R LEVELS. IF YOU RECEIVED A MODEL-BASED TARGET AT THE M5 LEVEL THAT ALLOS PRICE TO REMAIN WITHIN THE CONFINES OF THESE TWO NUMBERS, THEN ALL REMAINS THE SAME FOR THAT M15 CHART.

HOWEVER, IF A TARGET AIMS LOWER OR HIGHER BASED ON THE MODEL LOOKING AT A M5 CHART, IT REMAINS TO BE PROVEN THAT PRICE WILL SURPASS THESE VALUES, AND ONLY ONCE IT DOES SHOULD THE M15 TARGET BE CONSIDERED INVALID ON THE BASIS THAT THESE RANGES HAVE BEEN VIOLATED PER AGREEMENT SET AT THE M15 LEVEL IN THE FIRST PLACE.

So, no one target definition has power over the other. It is whether the validation/invalidation rules within one timeframe are respected, and not whether another prediction/forecast of a contrarian nature comes into the picture. It's all in the result within that M15 frame. If M5 forecast called for a target outside of the acceptable range in M15, then M15 fails only because the range was broken through at the level that was defined as invalidation of the forecast at that same M15.

Is this making sense?

David
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4xForecaster
Answer 1 - The short answer of 'No' I understand. The explanation will take me a little time to digest. Not from your explanation, but from my limited understanding of the strategies and terminology. I will continue to study up and let you know if I need further explanation.

Answer 2 makes perfect sense. I will review my charts again with this in mind - such a simple principle :)

Thanks David
Reply
DanLaffas
@DanLaffas - In essence, if you are used to working with patterns, for instance, you will see that a Gartley will take shape in any timeframe. The points that define this and other patterns respond only to the relative distance from one another to validate the existence of the pattern to which they give shape.

Hence, it does not matter to what timeframe this relative arrangement belongs to, as it may occur at any level, and for this reason, it is referred to as having a fractal nature, as the pattern can be seen in M1, M5, M15, ... all the way to monthly and above timeframes.

Because the module I have defined exists at any level, it carries the same properties as any other point-defined patterns, and can exit within itself at infinitely small and large degrees.

I hope this sheds a bit more light in my explanation.

David
Reply
4xForecaster
Yes it does. Thanks again.
Reply
01 SEP 2014 - Update:

If market geometry is not yet your thing, consider starting with very simple patterns, such as this AB = CD symmetrical pattern, which is at the root of all basic and advanced patterns (e.g.: Gartley, Butterfly, Bat, Crab, ... etc.) - In this example 9which is still unfolding at the time of this writing), I overlaid the projection of that pattern based on a directional bias and model that favor that level of entry, direction and price expansion. The fact that it corroborates well with this basic pattern adds credence to what would otherwise be a constant state of hesitation, and adds probability to the trade - Here is a link to interesting reads on this simple geometry, by a master in technical analysis, Larry Pesavento (article starts on page-2 of the link) - Here: https://www.dropbox.com/s/nx2psn56cmsvbdq/AB%253DCD_Pattern.pdf?dl=0

\$BTCUSD/Bitfinex - M15: Multiple Overlays of Wave Reduction + Predictive/Forecasting Model + Basic AB = CD Symmetrical Geometry:

Although I do not trade patterns, i can say without hesitation that @Akil_Stokes has joined this TradingView community, and is one successful trader whose living depends on the proper selection, recognition and execution of these pattern trading opportunities.

Cheers,

David Alcindor
Reply
4xForecaster
Link for the /u/Akil_Stokes/#
Reply
grahvity
LOL. Very nice. Thank you @grahvity!

David
Reply
grahvity
@Akil_Stokes has good lessons on mental conditioning and self-improvement on trading. Ask him about what "Kaizen" is. It's the simplest lesson and the most important in trading and everything else we strive to do in life.

David
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> if price falls below 476.57...
Would a simple breach qualify as a fail or would you want the price to close below that amount before calling it a fail?

Thanks in advance for your explanation. Always an interesting read.
Reply
grahvity
@grahvity

Well, what a perfect LIVE example we have here:

YES< best is to have price BACA (i.e.: not only Breaking Across but also Closing Across) to invalidate. If it does not do so, then there is perhaps a chance that it would do something to re-validate the original forecast, but I would NOT stay in it, as it would NOT be the plan:

Plan the trade, then trade (ONLY) the plan" as is commonly said.

David
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01 SEP 2014 - Update: Expanding Triangle ... Will It Be Good For Bulls?

From Twitter:
---------------------------
Can \$BTCUSD redeem itself through this expanding triangle?

via @tradingview | \$BTC \$USD #bitcoin #litecoin #forex
---------------------------

Cheers,

David Alcindor

----------------------
Twitter: @4xForecaster
----------------------
Reply
Looks like it's been invalidated.
Reply
MoonTrader
Yes it has most definitely - Alternate geometry might redeem this trade, but this remains to be proven - David
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452\$ B point
Reply
cezarone
a mean C
Reply
cezarone
Hi, @cezarone - Not sure I see what you are referring to. Do you have a chart?
David
Reply
4xForecaster
Im talking about a BB pattern same like in 2014-06-12 - 2014-07-02
If C point holds 0.886 fib (452\$) we have a pattern
Reply
cezarone
Reply
Tip for you: Never publish a chart during the day at this time of the day.

I saw the price starting to fall several hours ago, this was the logical conclusion of it. It always starts very very slow until it reaches the point of no return - which mostly happens when China wakes up.
Reply
ChartArt
Thank you @ChartArt - I appreciate the advice. What I publish is for educational purpose. The hits and misses are not as important as the demonstration of reasoning and adaptation to shifting situations. But it is good to know that there is a fundamental reason behind this miss. Again, very much appreciate you letting me know about this fact.

Cheers,

David
Reply
4xForecaster
China is the heavyweight in Bitcoin. They are most of the time steering the direction, especially between 6pm EST to 11pm EST (which is 6am to 11am in Hong Kong, China).

30 day BTC trading volume:
- in EUR: 42,244
- in USD: 845,881
- in CNY: 2,983,756

7 day BTC trading volume:
- in EUR: 8,475
- in USD: 165,189
- in CNY: 506,310

And this is USD volume even including the trading bot glitch at BTC-E

http://www.cryptocoinsnews.com/news/malfunctioning-bitcoin-trader-bot-causes-extremely-high-volume-bitcoin-exchange-btc-e/2014/08/31
Reply
ChartArt
@ChartArt - This is insane the volume differential. Indeed, the timing will matter extremely here. Appreciate this information. It's be nice to be able to have a colored band on the chart to remind the trader of important ranges of trading hours, such as the ones you are posting here.

Again, great info! Thank you!

David
Reply
4xForecaster
This is very much true according to my own observations as someone lucky enough to live in a similar timezone. Very often the 'plate is set' for China before they rise, and gauging the strength of the subsequent response is useful.
Reply
minbari
@minbari - Very interesting.

So, by saying: "Very often the 'plate is set' for China before they rise, ... ", do you mean that they continue to trend or cause the trend to reverse? These are important tidbits of observations you and @ChartArt are bringing here.

David
Reply
4xForecaster
Both!

So a classic example from more recent memory..... during the rally to 680 the West would conduct big market buys at around 6am China time which inevitably cause some kind of response later. But eventually a day comes when the market buys prompt no response, and then a few days later nothing happens at all.

My guess is that it is caused by eager beavers trying to get in front of the potential Chinese pump/avalanche, and when the tactic starts to fail it's an interesting indicator for reversal.
Reply
minbari
@minbari - Very nice and interesting from a fundamental perspective (at the retail level) considering that Bitcoin remains such a new asset with sets of behaviors that are yet to be better understood. All this makes a lot of sense, though, that China would wait and see if there is too strong of a market. That makes for a lot of people to spook, and a lot of weak-hands to shake - There is a long-term perspective worth keeping in sight here.

Thank you,

David
Reply
4xForecaster
It's now in the news :)

"Yuan Trades Now Make Up Over 70% of Bitcoin Volume"

"The majority of bitcoin transactions carried out over the last 30 days came from yuan trades, it has been revealed.

"China-based exchange BTC China tweeted that a total of 71% of bitcoin trades last month could be attributed to yuan users – the Chinese market, in other words."

http://www.coindesk.com/yuan-trades-now-make-70-bitcoin-volume/
Reply
ChartArt
Incredible - Wonder whether there is a institutional/state-level plan to acquire this currency as well, or simply whether this reflects a retail activity - Hours of operation (i.e.: market hours) are definitely vital here.

Thanks for sharing!!!

David
Reply
4xForecaster
One reason behind the high CNY volume might be that a high volume at an exchange attracts traders. And these Chinese exchanges therefore attract US traders who can simply move their BTC there and start trading (without fees) without having to buy CNY.

- Yes, no-fee when you trade BTC in China:
http://cointelegraph.com/news/112317/huobi-ceo-in-the-bitcoin-industry-centralization-and-decentralization-will-complement-each-other

- OKCoin seems to be more innovative than Huobi to me. They were the first Chinese exchange to offer a service for US traders:
http://dcmagnates.com/okcoin-to-launch-usd-trading-via-okcoin-com/
http://www.coindesk.com/chinese-exchange-okcoin-launch-usd-deposits-withdrawals/

- And OKCoin were quicker than Huobi to make a proof of Bitcoin reserve audit:
http://www.coindesk.com/okcoin-reveals-btc-reserves-104-chinas-exchanges-undergo-audits/

- Recently OKCoin launched a Bitcoin future contracts offering (Huobi did not):
http://www.coindesk.com/okcoins-bitcoin-futures-trading-aims-combat-price-volatility-risk/
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02 SEP 2014 - Update:

From Twitter:
------------------------
\$BTCUSD stomped at forecast level; Target coming near:

/x/j0j1TceU/#

via @tradingview | \$BTC \$USD #bitcoin
------------------------

David Alcindor
Reply
4xForecaster
Your model was 100% valid at btc-e...I applied a revised wave count (thanks to your insights) and I decided to go short from 483 with a target set at 475 and then 452.
Reply
IvanLabrie
@IvanLabrie - bingo! Excellent Ivan! Now, go get that beer you've worked so hard for!

:-)

David
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4xForecaster
Well with my profits I can't buy a thing, cause it's a demo account, but I'll drink in your honor :p
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IvanLabrie
Well, if you can't liquidate to liquify, you can always consolidate what you've learn to solidify that future account - It all goes to dust at the end.

David
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One small question, how do you pick 1 aka the start?
Reply
J.Livermore
@J.Livermore - I would love to provide a basic introduction to Elliott Wave principle, but this may be more than I can chew in this small thread. May be a teaching session would be in order IF and once TradingView comes up with video conferencing.

I would recommend looking into Mr. Prechter, Jr.'s EWI website. It has free information, and it would be coming right from the most reputable Elliotician available. If you encounter any problem during your review of the lessons that are offered (free) there, then let me know, so that I may be of additional help. But I truly believe that the start of such an endeavor should be granted with full credit to the authoritative website on this matter - David
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thank you
Reply
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