GBPJPY perferct trade scenario, both long & short

FX:GBPJPY   British Pound / Japanese Yen
574 14 19
In the beginning of next week I will be looking for a last leg higher for wave 5 of wave A in red. Once that is in place I will be looking for a 3 wave pattern consolidation to retrace at least 38.2% of the whole length of wave A (top has yet to be determined).
Once that consolidation is in place I will be looking for a wave C higher towards 173 and maybe even higher (this wave count can change in an impulsive 1-2-3-4-5 count).
So first things first, in the beginning of the week I like a last buy continuation trade based on lower time frames (<1hr) towards 164.8-165 followed by a correction for wave B. (wait for first impulse lower (a), wait for consolidation (b) and sell wave C (sell continuation) of wave B in red)

updates will follow.


Trade active: I will update as soon as I see a clear impulse and consolidation. I personally got triggered long at 159.44 because I traded the news volatility by means of a pending order. That stop is at break even and if this is a start of the next leg higher I consider this trade a 'bonus'. However the high probability trade will present itself once we see this price action continue and consolidate. I will update this trade if that happens. If we move lower I'm protected with my stop loss and wait for the next opportunity.
Comment: GBPJPY correction is not over yet and I believe we might test 156 before we see a reversal. I projected my wave count for buy trade opportunities. Updates will follow once GBPJPY reaches my reversal zone for a buy opportunity towards 173.

Hi, can you explain the difference between the a,b,c waves & A,B,C waves? I know a,b,c refers to the corrective waves defined in Elliot wave theory, but unaware of A,B,C notation
TimStuyts layyarx
Yes it is the difference in wave degree. So red 'ABC' is leading structure for this set-up and a daily correction of the bearish impulse. The black 'abc' are waves of lesser degree and explain the structure of 'ABC' in red. So what I like to see for daily 'ABC' in red is a 5-3-5 pattern where wave A has 5 inner waves, wave B has 3 inner waves and wave C has 5 inner waves.
layyarx TimStuyts
Well done Tim.
You had a buy stop order pending? Wasn't that highly risky? You could have been triggered only for price to drop right? I suppose you had your stop in place and took a calculated risk.
Risk works both ways without risk there is no profit or loss, it is about calculate your risk as you mention and I had my plan and stop in place. I only trade specific news events depending on structure.
Hi Tim. What TF do you look at for the break and what critera has to be met for you to enter. I'm thinking of a close above this TL on whatever chart you look at plus perhaps a retest of the TL from the other side? Thanks.
+1 Reply
Hey Marvin, I will be focused on a reversal by means of divergence from this zone. The trend line break is only a tool for visualization for me. So what you might see in terms of your criteria is: bullish impulse of lesser degree (the break you mention), then consolidation (the retest you mention) and then buy continuation. If we don't see the continuation I'm not in the trade and simply have to wait for next set-up. However I remove the trend line from my chart and focus on that reversal structure, this can be done on all time frames and I like to start on 15 min or even 5 min tf when the set-up is like this. This way I can add to my position when I see it happen on higher tf's as well. However my lower tf entries will be at break even already once that happens. The beauty of wave structure is that it happens on all degree's which present many opportunities to add.
+1 Reply
Marvin TimStuyts
Hmm. Ok. Nice detailed answer. I really appreciate it. It leads me to these questions (if you have the time). You mention divergence, but I don't see an oscillator on your chart. I see divergence on MacD on H1 now for example. But maybe this isn't what you mean. Maybe your eye is your oscillator?? And then the question that everybody wants to know. At what point to you deem the continuation good enough to enter?
In terms of Oscillator you can use several indicators. MACD, RSI, Awesome Oscillator etc. I like to use AO but am testing another oscillator as well at the moment but I only look at them once a certain set-up presents itself to see whether it shows confluence. A continuation is ready when we see an impulse of lesser degree followed by a consolidation. I will try to show this in my next updates if we see that happen because I'm not sure how to describe this because you need to recognize the difference between impulse and consolidation.
+1 Reply
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