Hello,
As promised I'm providing a detailed look into using TA in combination with FIBS S/R indicator.
So we are going up by a lot and we get this big "overcooked" signal on the 1H.
Does it mean we should go short right away ? No because we can still go up. So wait for the signal for the price to cross under R5. That is were a potential short can be placed.
We can see that the MF RSI also got a bear div. Take a note that the bear div needs a few candles, it will not paint on the spot because it needs a few candles (depending on the inputs provided for lookback) to identify a new high with lower RSI.
These two signals coupled together showed that we where in a potential reversal.
We then started going making lower highs and lower lows so the down trend was confirmed.
Now that resistance is identified let us see where the support is.
We can also do a wave count like this, but that wick on the third wave is pretty nasty.
What comes after a 5 wave count ? ABC correction
We can see that the R1 R2 0.5 0.618 ratios now act as resistance.
We than get a bullish harmonic pattern with a lower D, closing above R0 that acted as support. Notice the wick D, that was a close one.
The first bullish target B point got hit. You can see that previous R0 plot acted as resistance.
We then entered in a consolidation triangle that broke to the down side retested and dropped to a measured moved that hit 100% at negative R1 and R2 -0.5 - 0.618 fib ratios (acted as support).
The next one is a bit tricky. You could argue that this was cup and handle pattern where resistance was form by previous breakdown and the triangle resistance. 100% hit the measured moved.
In this particular case resistance and support was in between R3 and R4, ratio 1 (previous high) and ratio 1.618.
We enter in a consolidation mode where the R1 and R2 0.5 and 0.618 ratios acted as support.
Looking at the chart we can now see a that the trend lines do not connect with highs and lows properly.
So I change the start of the previous low of 2.
A bull flag with a measured moved that did not hit 100% yet.
Not sure where to put the start of the pole so I've put two measured moves.
Also notice that the "overcooked" got flashed with signal and we did see a retrace almost all the way to R3 the previous high.
Doing a wave count reveals that we are about the see wave 5.
My price target for wave 5 is the previous high from the initial drop. Why ? Well will have to wait and see but I think that will be the new R5 ratio.
Also looking at the big picture this is the 0.786 ratio from top to bottom.
We will have to wait and see.
As promised I'm providing a detailed look into using TA in combination with FIBS S/R indicator.
So we are going up by a lot and we get this big "overcooked" signal on the 1H.
Does it mean we should go short right away ? No because we can still go up. So wait for the signal for the price to cross under R5. That is were a potential short can be placed.
We can see that the MF RSI also got a bear div. Take a note that the bear div needs a few candles, it will not paint on the spot because it needs a few candles (depending on the inputs provided for lookback) to identify a new high with lower RSI.
These two signals coupled together showed that we where in a potential reversal.
We then started going making lower highs and lower lows so the down trend was confirmed.
Now that resistance is identified let us see where the support is.
We can also do a wave count like this, but that wick on the third wave is pretty nasty.
What comes after a 5 wave count ? ABC correction
We can see that the R1 R2 0.5 0.618 ratios now act as resistance.
We than get a bullish harmonic pattern with a lower D, closing above R0 that acted as support. Notice the wick D, that was a close one.
The first bullish target B point got hit. You can see that previous R0 plot acted as resistance.
We then entered in a consolidation triangle that broke to the down side retested and dropped to a measured moved that hit 100% at negative R1 and R2 -0.5 - 0.618 fib ratios (acted as support).
The next one is a bit tricky. You could argue that this was cup and handle pattern where resistance was form by previous breakdown and the triangle resistance. 100% hit the measured moved.
In this particular case resistance and support was in between R3 and R4, ratio 1 (previous high) and ratio 1.618.
We enter in a consolidation mode where the R1 and R2 0.5 and 0.618 ratios acted as support.
Looking at the chart we can now see a that the trend lines do not connect with highs and lows properly.
So I change the start of the previous low of 2.
A bull flag with a measured moved that did not hit 100% yet.
Not sure where to put the start of the pole so I've put two measured moves.
Also notice that the "overcooked" got flashed with signal and we did see a retrace almost all the way to R3 the previous high.
Doing a wave count reveals that we are about the see wave 5.
My price target for wave 5 is the previous high from the initial drop. Why ? Well will have to wait and see but I think that will be the new R5 ratio.
Also looking at the big picture this is the 0.786 ratio from top to bottom.
We will have to wait and see.
