This chart is an extension of the 0-3 Line IDEA presented on my linked chart below, the only difference is the shorter time frame. As I am writing this the market has exploded to the upside and I anticipate it will correct and follow the new anticipated slope ( See green upward dotted arrow)
NOTE: ACTION LINE'S & REACTION LINES ARE EQUIDISTANT TO THERE RESPECTIVE CENTER LINES.
NOTE 2: THE SMALLER DOWNWARD SLOPING PARALLELS WERE DRAWN FIRST AFTER THE WHITE P3 BOTTOM CONFIRMED.
NOTE 3: EACH ACTION LINE MUST PASS THROUGH A LOW & A HIGH .
If you focus your attention on the Yellow P3 & the spike bar that FIRST TOUCHED the Purple Downward Parallel.....& then began to turn. At this point we would draw our NEW Yellow P0-P3 Centre Line, Our yellow Action Line 1 & most importantly our yellow reaction line 1.
Observation 1: As the market plummeted from yellow P3 We anticipated the slope ( Market was falling faster ) and we had an area were the move was likely to end ( The over-run was actually expected due to the speed of the fall in relation to the anticipated slope )
Observation 2. We then experienced a bottoming formation ( We new at this stage the move was over ) before the next move up.
Observation 3. We now have a new anticipated slope ( See upward green arrow )
I hope you have enjoyed this IDEA!
Observation 1The market broke the bottom of that candle and was falling at a FASTER rate than the anticipated slope
PART 1: Establishes a probable turning area of a move & then the anticipated Slope of the reversal.
Your first step is to locate & draw in a good 0-3 line ( The first one above started at the Top )
Your second step is to move the parallel tool in tradingview "Backwards" to locate where both a TOP and a BOTTOM intersect ( can be a little out ). This is your ACTION LINE
You then CLONE the newly created parallel and move it forward until you line it up with the CENTRE LINE.
You now have the REACTION LINE......Just watch the market when it hits this line..... In the above example: the market went down as soon as the candle hit the line.......YOU then have the anticipated slope of the next move.
PART2. To locate an area where the new move is likely to END.......& obviously where the NEXT new move is likely to begin
RINSE & REPEAT PART 1. Starting with a NEW P0 which in the above example was the LOW following the previous P0 TOP!
I hope that I have clarified that for you, once you get a good Upward & Downward Combination your good to GO! I would advise to go back and TEST IT there are P0-P3 Lines Everywhere:)
PS: Please note, many times this method is very accurate down to the BAR however there are times when you get an overrun ( SEE above example end of the move) however you can use this to your advantage as the subsequent reversal MUST correct and the move is usually a BIG ONE in these situations
The intersection of the 2 REACTION Lines may not always TOUCH the BAR that turns the market ( wouldn't we all love this to happen )........BUT do not underestimate how powerful IT'S Location CAN BE:) I'll let the chart speak for itself!
It takes some time to get your head around it, but well worth the effort. Elliot Wave, when interpreted correctly, is very powerful it is very similar to Andrews 5 Pivots & the ABC corrective wave and was acknowledged in his Action Reaction Course but there are some noticeable differences. The above is a great road-map of where the beginning & end of a move is likely to be, this allows me to zoom in when a Turn is near & then when my entry is activated to then widen my stop so I can stay in a BIG move longer. I use different methods for Entry,Exits & Stops but good money management is at it's core ie I aim for only Good Risk/Reward of at least 2:1 with a 1:1 cover. I get caught some times but I always aim for low risk.