EverythingForex
Long

USDJPY: Now That The Dust Has Settled..Wave (iii) Is NOT Over!

FX_IDC:USDJPY   U.S. Dollar/Japanese Yen
Wow! Now that's what I call a drop! A very nice one if you caught the move. In my previous post on this pair, I said that there was a MAJOR TREND CHANGE occurring (see Related Ideas: "ANALYSIS: USDJPY: MAJOR Trend Change Forthcoming?") and also pointed out 2 patterns that were showing the way down (see Related Ideas: "TRADE: USDJPY:2 LONG-TERM Patterns Could Yield 1000+ pips"). This recent price action is supportive of the MAJOR TREND CHANGE occurring.

Here's the weekly chart I posted last week about this trend change:
snapshot

And the DAILY Chart showing what I was expecting to happen at that time and what I am expecting to happen:
snapshot

WHAT IS HAPPENING NOW
Right now, we should be in the wave ( iii             ) of (v) of that wave A decline you see in the Weekly Chart above. Within the wave ( iii             ), prices have just finished wave (3) and is now consolidating in a wave (iv). Wave (iv) should take prices back up to the TP1 and maybe TP2 of the completed bat pattern . Then wave (v) should resume the downtrend to complete the POTENTIAL bullish crab pattern and wave ( iii             ) before reversing back up in a wave (iv).

MY TRADING PLAN
I am net LONG in my positions right now on this pair looking for the wave (iv) retrace up to the TP1 of the bat. At that point, I will close all LONGS and be net SHORT. I will watch the price action and be looking for another opportunity to add to my SHORT positions for further price declines in a wave (v).

*DISCLAIMER:
Please keep in mind that I am not giving any trading signals or trade calls here. Only providing my own trade thoughts for your benefit and insight as to my trading technique and style. Please don't ask if you should or should not take the trade. If you are not sure, then you do not have a trading plan for yourself in place. I suggest you make one before you continue to do any trading!

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Hi man, I think larger (III) red already has been done as it's more than 5 times greater than (i) and RSI is at extreme
Reply
Thanks for your POV. Love to see your chart on the wave count. But first, there's no rule or guideline as to the length of wave 1's in relation to the length of wave 3's. wave 3's are typically many times the length of wave 1's. And really, I don't give that much weight to the RSI being oversold/overbought as an indication of impending move coming soon. Yes, when RSI is at an extreme, there will be a counter-reaction coming but just like divergence, it does not tell you when. I have seen many times the RSI stay in the overbought/oversold region for extended periods of time. And also, it's TF dependent. It may be in the extreme on one TF but not another.

On of the reasons that I am not thinking wave (iii) is over is because of the price action. What we just witnesses, the powerful move, is typical of wave 3 price actioin. Another reason is because if you try to count the subwaves of the recent move wave (iii), counting out 5 waves is not possible. Therefore, my suggestion that the wave (iii) is not over and still have the completion of wave (iv) and wave (v) to go. GL!
Reply
aibek EverythingForex
My pleasure man, I didn't mean to point on the strength or weakness but as extremes in macd / rsi confirm 3rd wave.

snapshot
Reply
aibek aibek
but it can be truth on either side or even 3rd variant as EW are very subjective, just shared (sorry if you didn't ask me ;-)))
Reply
aibek aibek
subwave 3 also at macd local maximum, and currently wave 5 in almost all currencies are extended - like in commodities
Reply
No worries, bro. I appreciate your constructive comments. Always welcome alternate POV's as I am not perfect. Personally, I don't use MACD. Lag way too much to be useful. In fact, I don't rely on oscillators at all other than just using the RSI to note extremes and then don't really give that so much weight. Price action is the only true real-time indicator and all I use. Nothing against you or anyone else using them of course. Using them in association with a system can be effective, I know. Just not my style. Thanks and GL!
Reply
aibek EverythingForex
Peace, bro! Often I hear such an express "price action" - is it simple behavior of price or it's kind of terminology?
Reply
The term "price action" is just understanding how the prices are moving and what that movement is saying. Say for example, the recent drop in this pair. That drop is a very bearish price action and is foretelling and confirming a major trend change. Remember, the reasons why the market moves is due to 2 things: fear and greed. Price action represents that fear and greed. Realizing that, you can actually "see" where and when prices are moving or going to move. Combined with a lot of experience, interpreting price action is not so difficult. But to the untrained eye, it can be hard to see.
Reply
aibek EverythingForex
You gave me more than I asked and I am very thankful to you for this detailed reply which means for me that you are seasoned trader and have solid base. Yes now I understand what this "new" word mean as more than 10 years watch markets in price action ))).
Best of luck man!
Reply
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