Let´s learn something today / ETHEREUM / by ThinkingAntsOk
If you want to learn a little bit more about Technical Analysis, this is your post! We will analyze ETHEREUM and see the logic behind what we see.
The first item is the breakout of the Falling Wedge what that means?
It means that from a theoretical perspective, we should have a new impulse proportional to the previous one. Which one? The one that came before the Falling Wedge.
Elliott Who was one of the first guys on using a systematic approach to study the markets saw the next phenomena: after an impulse, a correction comes, and after Correction, a new impulse comes. In this case, we have A (first Impulse) B (The falling Wedge, the Correction of A), and now we are on C (the continuation after a correction). Can we make some projections? Yes sure you can expect C to be Equal to A or you can use Fibonacci Extensions to look for the end of that new impulse.
What about the current Correction?
On every impulse, you will have corrections of a lower degree on them. Elliott noticed that every impulse is composed by 3 impulse waves and 2 corrections (it's a mistake to try to look for this on a specific way on every impulse, is useful as a guide of what should come or where you are right now)
Now we can see that a considerable motive wave came after the breakout of the falling Wedge (that can be A or 1). Currently, we can see a correction very similar to the previous one (that can be B or 2) So now we can expect a new motive wave is coming to be 3 or C.
Ok Great, and how far can it go?
The best way to spot the next stopping point is by using previous levels and see where the price stopped. In this case, we have the Top of the Falling Wedge as a reversal zone.
So we should conclude that the next resistance zone should be there and that must be our first Target of the new motive wave coming and there we should expect a reversal or a corrective structure ( a corrective structure is a formation in which the price stoped makes a certain pattern and then continues)
Great and how can I trade this?
Here is where most people fail to trade their analysis. Either they lose money or lose the opportunity.
So what can we do? What you can do is to expect the current formation es clear enough that you can say, "Oh, I see the edges of the structure is extremely clear. After that, you should wait until the price is on the upper trendline of the corrective structure. There expect a Breakout and then a pullback to the broken structure. "Congrats, that is your spot, there you can develop your trade with your Entry-level above the first breakout and your stop can be below the pullback or in the middle of the whole Correction. And your Target? The resistance zone we explained to you before. There, your Risk Reward Ratio will be 1:2 approx, meaning that you will make 2 times the amount of money you were risking.
We hope this can be useful guys any question you can do it below! Enjoy
The first item is the breakout of the Falling Wedge what that means?
It means that from a theoretical perspective, we should have a new impulse proportional to the previous one. Which one? The one that came before the Falling Wedge.
Elliott Who was one of the first guys on using a systematic approach to study the markets saw the next phenomena: after an impulse, a correction comes, and after Correction, a new impulse comes. In this case, we have A (first Impulse) B (The falling Wedge, the Correction of A), and now we are on C (the continuation after a correction). Can we make some projections? Yes sure you can expect C to be Equal to A or you can use Fibonacci Extensions to look for the end of that new impulse.
What about the current Correction?
On every impulse, you will have corrections of a lower degree on them. Elliott noticed that every impulse is composed by 3 impulse waves and 2 corrections (it's a mistake to try to look for this on a specific way on every impulse, is useful as a guide of what should come or where you are right now)
Now we can see that a considerable motive wave came after the breakout of the falling Wedge (that can be A or 1). Currently, we can see a correction very similar to the previous one (that can be B or 2) So now we can expect a new motive wave is coming to be 3 or C.
Ok Great, and how far can it go?
The best way to spot the next stopping point is by using previous levels and see where the price stopped. In this case, we have the Top of the Falling Wedge as a reversal zone.
So we should conclude that the next resistance zone should be there and that must be our first Target of the new motive wave coming and there we should expect a reversal or a corrective structure ( a corrective structure is a formation in which the price stoped makes a certain pattern and then continues)
Great and how can I trade this?
Here is where most people fail to trade their analysis. Either they lose money or lose the opportunity.
So what can we do? What you can do is to expect the current formation es clear enough that you can say, "Oh, I see the edges of the structure is extremely clear. After that, you should wait until the price is on the upper trendline of the corrective structure. There expect a Breakout and then a pullback to the broken structure. "Congrats, that is your spot, there you can develop your trade with your Entry-level above the first breakout and your stop can be below the pullback or in the middle of the whole Correction. And your Target? The resistance zone we explained to you before. There, your Risk Reward Ratio will be 1:2 approx, meaning that you will make 2 times the amount of money you were risking.
We hope this can be useful guys any question you can do it below! Enjoy
