Wave 5 About To End (Alternative Wave Count)
Thanks to @manish_damani for his comment on my previous post entitled "Monthly Wave Count For Crude Oil"
This chart is an alternative wave count for my previous chart: www.tradingview.com/...Wave-3-About-To-End/
There is a solid ground that we are around the top of wave 5 of wave C, instead of wave 3. The reason is...there is an ending diagonal (refer to the turquoise converging lines at the right side of the chart). As stated in the notes from Elliott Wave International,
"An ending diagonal is a special type of wave that occurs primarily in the fifth wave position at times when the preceding move has gone "too far too fast," as Elliott put it. A very small percentage of ending diagonals appear in the C wave position of A-B-C formations. In double or triple threes (to be covered in Lesson 5), they appear only as the final "C" wave. In all cases, they are found at the termination points of larger patterns, indicating exhaustion of the larger movement."
In an ending diagonal, wave 5 often makes a throw-over. In other words, throw-over happens because the market makers (the big boys) want to get more contracts to sell. So they push the price synthetically above the majority expectations to hit the stop loss of other traders. Therefore, in my opinion, it's quite hard to predict where the top will be.
Nevertheless, often there are throw-overs, but at times there might be no throw-over too. :)
Anybody would like to share on your short entry plan? Jeff Kennedy taught to entry short (sell stop limit) below wave 4 in the ending diagonal. But the stop loss is huge (above the top of wave 5), especially if throw-over occurred in wave 5 of the ending diagonal.
Any suggestion(s)?
This chart is an alternative wave count for my previous chart: www.tradingview.com/...Wave-3-About-To-End/
There is a solid ground that we are around the top of wave 5 of wave C, instead of wave 3. The reason is...there is an ending diagonal (refer to the turquoise converging lines at the right side of the chart). As stated in the notes from Elliott Wave International,
"An ending diagonal is a special type of wave that occurs primarily in the fifth wave position at times when the preceding move has gone "too far too fast," as Elliott put it. A very small percentage of ending diagonals appear in the C wave position of A-B-C formations. In double or triple threes (to be covered in Lesson 5), they appear only as the final "C" wave. In all cases, they are found at the termination points of larger patterns, indicating exhaustion of the larger movement."
In an ending diagonal, wave 5 often makes a throw-over. In other words, throw-over happens because the market makers (the big boys) want to get more contracts to sell. So they push the price synthetically above the majority expectations to hit the stop loss of other traders. Therefore, in my opinion, it's quite hard to predict where the top will be.
Nevertheless, often there are throw-overs, but at times there might be no throw-over too. :)
Anybody would like to share on your short entry plan? Jeff Kennedy taught to entry short (sell stop limit) below wave 4 in the ending diagonal. But the stop loss is huge (above the top of wave 5), especially if throw-over occurred in wave 5 of the ending diagonal.
Any suggestion(s)?
Comment:
Someone plot like this:
I don't agree on this plotting because in an ending diagonal, most of the time wave 4 overlaps wave 1. in wave 4, the daily candle closes below the top of wave 1. That is the main factor that makes the pattern looks like a rising/falling wedge.
But the condition now is, wave 4 didn't overlap wave 1 at all. Indicating it is an impulse. Only at wave 5 of wave 5 looks like a genuine rising wedge / ending diagonal.
I may be wrong but that is how I look at it for now. Feel free to correct me. :)
I don't agree on this plotting because in an ending diagonal, most of the time wave 4 overlaps wave 1. in wave 4, the daily candle closes below the top of wave 1. That is the main factor that makes the pattern looks like a rising/falling wedge.
But the condition now is, wave 4 didn't overlap wave 1 at all. Indicating it is an impulse. Only at wave 5 of wave 5 looks like a genuine rising wedge / ending diagonal.
I may be wrong but that is how I look at it for now. Feel free to correct me. :)
Please spot any mistakes that I've made. Feel free to share your trading plan too. :)