Dear friends,
Most of the time we first guess, then assume and finally start calculating whether the price of an instrument is to go up or down.We then make a strategy either to go long or short, still a number of times we fail to gain the profit as per calculations. It is because of the swings that creates confusion and we have to close our positions in fear.
but if the strategy is based on logical theories, then a trader can trust on his logic to stay rather to close the position. Such is the beauty of this market is it agrees with almost all kinds of theories. Here in this example I have tried to show through elliot waves theory how crude oil have classically reacted to the price action levels mentioned in the books.
I have taken 4 hour candle chart.
The most interesting part is sometimes we need a bit of luck also to become successful in the market , because from the example at the point 4928 where 3rd impulsive wave is ending at 1.618, an expectation comes in mind that it might reverse at maximum .5 retracement to continue its 5th wave journey. Often it happens, but as a trader it is not wise to expect something from the market we have to go with the going.
We can see at that point script has paused for 4 hours, giving an inside candle. and that is becoming the decider candle as breaking the high of that candle has taken the price confirming the bearish trend has overtaken and changed to a bullish one. But once the low of that candle broken, it confirmed the bears have taken control of trend as per the elliot wave theory. It came all along 1.0 impulsive of the 5th wave to complete the 5th wave and an identical 1.0 retracement happened to complete the wave A. Also a natural wave B formed with a gap down from where it should have make a journey to 5288. but it did not happened. At this point a long time consumed by both buyers and sellers to decide the trend which finally again controlled by the sellers just to confirm that wave Y is to take control of the trend which is likely to take the price to 4158.
So from the chart we see that even if the price moved as per the wave theory, still if stoploss not set intelligently, instead of making money one would lose money. One more thing we can note from this example that if we can not remember the price levels we will never become a successful trader as the swing lows and swing highs always confuse us.
Finally I request all friends to comment on this observation if something is missed by me.
Most of the time we first guess, then assume and finally start calculating whether the price of an instrument is to go up or down.We then make a strategy either to go long or short, still a number of times we fail to gain the profit as per calculations. It is because of the swings that creates confusion and we have to close our positions in fear.
but if the strategy is based on logical theories, then a trader can trust on his logic to stay rather to close the position. Such is the beauty of this market is it agrees with almost all kinds of theories. Here in this example I have tried to show through elliot waves theory how crude oil have classically reacted to the price action levels mentioned in the books.
I have taken 4 hour candle chart.
The most interesting part is sometimes we need a bit of luck also to become successful in the market , because from the example at the point 4928 where 3rd impulsive wave is ending at 1.618, an expectation comes in mind that it might reverse at maximum .5 retracement to continue its 5th wave journey. Often it happens, but as a trader it is not wise to expect something from the market we have to go with the going.
We can see at that point script has paused for 4 hours, giving an inside candle. and that is becoming the decider candle as breaking the high of that candle has taken the price confirming the bearish trend has overtaken and changed to a bullish one. But once the low of that candle broken, it confirmed the bears have taken control of trend as per the elliot wave theory. It came all along 1.0 impulsive of the 5th wave to complete the 5th wave and an identical 1.0 retracement happened to complete the wave A. Also a natural wave B formed with a gap down from where it should have make a journey to 5288. but it did not happened. At this point a long time consumed by both buyers and sellers to decide the trend which finally again controlled by the sellers just to confirm that wave Y is to take control of the trend which is likely to take the price to 4158.
So from the chart we see that even if the price moved as per the wave theory, still if stoploss not set intelligently, instead of making money one would lose money. One more thing we can note from this example that if we can not remember the price levels we will never become a successful trader as the swing lows and swing highs always confuse us.
Finally I request all friends to comment on this observation if something is missed by me.