Nikkei: The Why's & How's I'm SHORT Now - Lesson In Wave Trading

There is NEVER a SURE 100% trade. And I'm not giving you one. Let's be clear about that. But as you can see on my chart, I'm sure enough about what is about to happen to the Nikkei that I am already SHORT on it TWICE OVER. And if prices do go the way I am projecting and they do pull back up and cover those HUGE gaps that were left behind, I'll be looking to sell again! But let me explain why I think this.

What I see happening is that the recent high that was just established could very well have been the top of a wave (X) correction. This following the completion of a wave (W). That wave (W) was a sharp downward correction off the possible completion of that HUGE LONG impulse wave that lasted years! That wave (W) crash signaled the end of that MAJOR impulse wave. I had been calling that long impulse wave up as a wave (iii) and that crash down ended it. So why didn't I label that wave (W) drop as a completed wave (iv)? Well, it could be but highly unlikely given that it was so sharp and brief. Wave 4's don't tend to be that way. Wave 4-type corrections usually unfold in an long drawn out fashion. And if you have been counting waves as long as I have, you would've have seen this kind of price action take place hundreds if not thousands of times in the 26+ years that I have been trading. And I also seen just as many times what follows, too.

So for arguments sake, let's just say that my wave count is correct and that was indeed a completed wave (iii) and what followed was a wave (W). After a wave (W), you would expect that the next wave will be a corrective wave (X). And what did follow was a very clear 3-wave corrective wave (X). But only one problem....that correction ended ABOVE the top of what I labeled as the wave (iii) end. So, that opened up 2 possibilities...1) that the new high was actually the end of that MAJOR wave (iii) or 2) as I see it, this overall correction following where I labeled the end of the wave (iii) is unfolding as an extended flat where the corrective wave (X) does exceed the high of the previous complete impulse wave. If that is the case, then we can already project what is to happen next and also project possible targets based on the rules that we have for extended flats and how they tend to unfold.

Regardless, I trust my wave count because as you can see, I've hit 4 out of 4 trades pulling in over +8000 points over the course of this year JUST on the Nikkei alone! You don't even want to know how I did in the other major indexes as you would find it hard to believe! But that is besides the point. The point I'm trying to make here is that if you can apply a good, workable wave count combined with a good knowledge about price action, you can make trades like these. Those 4 out of 4 (100%) winning trades are just the ones that I have already closed and banked the profits on. That does not include the 2 OPEN SHORT trades that are already in profit now.

If you find it hard to believe me, here is my chart I published to my followers back on September 12th showing my projections on what was to happen in the Nikkei. As you will see, that "explosion up" that ended what I have recently labeled the wave (X) I had already predicted would happen MONTHS AGO. That is the power of wave counting in action!

There will be those that argue that my wave count is not correct and if you know me, you also know that I don't prescribe to the theory that you absolutely have the ABSOLUTE correct wave count in order to make money. No. You just have to have a workable wave count that puts you on the right side of the market.

So if you believe me about what I see, you will want to wait for prices to pullback before you look to get SHORT.

If you want to know more, PM me or see my signature box below for more info.

Comment:

Well, prices did not "follow" my projections and retrace back up to cover the gaps....YET. But you konw, I don't mind at all! This is what it is like to be wrong and STILL MAKE PROFITS. Prices are dropping and I'm just fine with that!