My Elliotical Approach to XAUUSD Short.
Hello traders!
1. We see 5 distinct waves each with their own seperate qualities as clearly mentioned on the chart.
2. We see and ending diagonal in wave v, which was followed by a swift and sharp wave (A).
3. Wave (A) retraced 61.8% which also happens to be a major resistance of the XAUUSD market on the daily tf.
4. Wave (A) also divides in 5 waves which I have not marked on the chart. This is so, because wave 1 and wave 2 of wave (A) seem to have operlapped a bit with wave 2 retracing close to 100% of wave 1. This can happen in highly leveraged markets. For those who are new to Elliot Wave Theory, wave 2 should not retarce more than 100% of wave 1.
5. Wave B of a correction consists of 3 waves of which 2 waves are impulsive. B is considered elliotically non-tradable. But it components are impulsive and some part of it can definitely be traded.
6. Important resistance and support zones on the chart also point towards reversal of the XAUUSD market.
7. We do have to wait for the formation of wave 1 and wave 2 of (A) wave for confirmation.
8. Definitive targets and invalidation points will come in existence after confirmation.
Do use proper risk management.
Happy Trading!
Profits,
Market's Mechanic.
1. We see 5 distinct waves each with their own seperate qualities as clearly mentioned on the chart.
2. We see and ending diagonal in wave v, which was followed by a swift and sharp wave (A).
3. Wave (A) retraced 61.8% which also happens to be a major resistance of the XAUUSD market on the daily tf.
4. Wave (A) also divides in 5 waves which I have not marked on the chart. This is so, because wave 1 and wave 2 of wave (A) seem to have operlapped a bit with wave 2 retracing close to 100% of wave 1. This can happen in highly leveraged markets. For those who are new to Elliot Wave Theory, wave 2 should not retarce more than 100% of wave 1.
5. Wave B of a correction consists of 3 waves of which 2 waves are impulsive. B is considered elliotically non-tradable. But it components are impulsive and some part of it can definitely be traded.
6. Important resistance and support zones on the chart also point towards reversal of the XAUUSD market.
7. We do have to wait for the formation of wave 1 and wave 2 of (A) wave for confirmation.
8. Definitive targets and invalidation points will come in existence after confirmation.
Do use proper risk management.
Happy Trading!
Profits,
Market's Mechanic.
Comment:
We have a breakdown after the formation of M pattern on the 30 min tf. Going short.
Trade active
Trade closed manually:
Closed at entry point. Still waiting for W1
Comment:
The XAUUSD market may have taken its own sweet time but finally, we have a strong impulse down.