DayFarrell
Short

GBPJPY LOOKING FOR FURTHER SHORT BEFORE LONG

FX:GBPJPY   British Pound/Japanese Yen
I'VE LABELED THIS CHART A, B, AND C, SO THAT MY EXPLANATION OF EACH WILL BE CLEAR. THIS CHART ANALYSIS IS BASED ON FIB RATIO (PHI) ELLIOTT WAVE ANALYSIS, RATION SEQUENCING AND CONFLUENCE, I'VE DISREGARDED SUPPORT AND RESISTANCE , AS IT'S MY BELIEF THAT SUPPORT AND RESISTANCE ARE DEPENDABLE ON RATIO CONFLUENCE.

A.
THIS FIRST SECTION IS THE LEAST IMPORTANT SECTION IN MY ANALYSIS. I'VE LABELLED IT COMPLETED BECAUSE THE 38.2% PULLBACK HAVE BEEN COMPLETED BY A 1.618 EXPANSION. AND THE 50% PULLBACK HAVE ALSO BEEN COMPLETED BY A 1.117 EXPANSION AND THE 1.27% WHICH USUALLY FOLLOWS. IT'S IMPORTANCE TO US HOWEVER, IS A MATTER OF SEQUENCE. IMMEDIATELY AFTER THESE 2 MOVES, WE SEE A 38.2% PULLBACK AND CURRENTLY WE ARE LOOKING FOR A 50% PULLBACK FROM THE SECOND MOVE. HOWEVER, INSTEAD OF LOOKING FOR A 50% PULLBACK THIS TIME, I'M BIASED TOWARDS A 61.8% PULLBACK OR GREATER FOR OUR CURRENT STRUCTURE. THIS BRINGS US ON TO SECTION B.
B.
THE TWO LINES THAT ARE PRESENT IN THIS SECTION REPRESENTS THE STRENGTH OF THE TWO SMALLER MOVES LABELED II, AND IV. WHEN COMPARED IT IS EASY TO SEE THAT THE FIRST MOVE II, IS MUCH STRONGER THAN THE SECOND IV. WHEN COMPARED, OUR SECOND MOVE IV IS ABOUT 11.8% LESS THAN THE FIRST II. HAVING AN UNDERSTANDING OF THE LAW OF AVERAGES HERE WILL HELP US MAKE SENSE OF THIS, BUT I WILL STILL EXPLAIN. PRICE WILL ALWAYS TEND TO TRAVEL CLOSE TO ITS AVERAGE, AND ANY LARGE DEVIATION FROM THAT AVERAGE IN THE OPPOSITE DIRECTION OF THE TREND WILL RESULT IN A DRASTIC PULLBACK TOWARDS THE AVERAGE. THIS IS THE CONCEPT BEHIND BOLINGER BAND, AND ENVELOPE . IN THE FIRST MOVE, THE AVERAGE HAS A STRONG UPTREND MOVE WHICH MAKES LARGE RETRACEMENTS VERY DIFFICULT. CLOSER TO THE TOP OF THIS MOVE, WE SEE PRICE ACTION             BEGINS TO LESSEN IN DEGREES WHICH GIVES MORE ROOM FOR RETRACEMENT TO PLAY. SO A 61.8% OR GREATER IS NOT IMPOSSIBLE, IN FACT IT IS HIGHLY PROBABLE. I MUST ALSO MENTION THAT THE CONCEPT OF AVERAGES IS WHAT IS OFTEN MISTAKEN AS THE BANK CONSPIRACY. DURING THE RELEASE OF IMPORTANT FUNDAMENTAL NEWS EVENTS MANY PERSONS GET CAUGHT IN THIS WEB.
C.
OUR LAST SECTION IS DESCRIBING OUR EXPECTATIONS FOR THE FUTURE. THE ENTIRE ANALYSIS WAS CREATED TO GAUGE THE SHORT, AND NOT SO MUCH THE LONG THAT WILL FOLLOW. I AM EXPECTING FURTHER LOWS TO COMPLETE THE 50% AND THEN 61.8%. AND AFTER I CAN SEE FURTHER UPWARD MOVE. MY 1ST LONG TARGET IS STILL THE SAME WHETHER WE SEE A 50% OR A 61.8% PULLBACK. I'VE USED A SIMPLE EQUATION TO DETERMINE THIS TARGET. WHERE THE PULL BACK PERCENTAGE IS DIVIDED BY THE ADVANCEMENT (E.G. 50/120.7 OR 61.8/120.7. BOTH PLACE US AT THE SAME TARGET.
I HOPE ITS NOT TOO COMPLICATED, IT IS NOT INTENTIONAL, I BELIEVE THAT ONE MUST HAVE A COMPLEX OVERVIEW TO BE ABLE TO DETERMINE PRICE ACTION             . ANOTHER ADVICE TO ANY TRADER OUT THERE, IF YOU ARE TRADING WITHOUT A THOROUGH KNOWLEDGE OF ELLIOTT WAVE , LET IT BE ON YOUR LIST OF PRIORITY TO HAVE, I SEE IT AS A PREREQUISITE TO TRADING . THE CONCEPT IS NOT JUST ABOUT TRADING, IT IS IN LIFE ITSELF.
GOOD LUCK WITH YOUR TRADES FOR THE UPCOMING WEEK, I WISH YOU MUCH SUCCESS. ALWAYS WILLING TO HEAR WHAT YOU THINK SO FEEL FREE TO LEAVE A COMMENT.
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