It seems XRPUSD is presently nearing the end of a leading contracting diagonal. There are a few rules to be observed with these, and the price action of the last couple of weeks abides by them so far.
In a leading diagonal, waves 2 and 4 have to zig-zags (I've drawn those in); it's clear in the chart that they are. Wave 1 was also a zig-zag, albeit a very large one. Wave 3 appears to be more of an impulse wave, though as a guideline that is normal (1, 3 and 5 appear to be impulses even though they are zig-zags). No wave retraces beyond the end of the preceding waves, which satisfies another criterium of a diagonal. Also, in a leading diagonal, the fifth wave has to move beyond the end of wave 3, so we should be breaking the 27th March top soon.
In a contracting diagonal, wave 5 has to be shorter than 3, 3 has to be shorter than 1, and 4 has to be shorter than 2; all good so far.
Wave 5 in a diagonal often ends at or slightly beyond (throwover) a line drawn from the ends of waves 1 and 3, projecting a price in the 0,20 range. It seems that the present fifth wave may be a zig-zag, with a triangle for wave B, and if we extend the A-part of that same wave, we'd also hit that same target. That target would also still satisfy the criterium of wave 5 being shorter than wave 4.
So, on the short term we should see an impulse wave moving up to the 0,20 area, after which we can expect a sharp down move; but let's deal with that when we get there.
Let's see what happens.
Disclaimer: This isn't trading advice, don't trade with what you can't afford to lose, etc. You know the drill.
In a leading diagonal, waves 2 and 4 have to zig-zags (I've drawn those in); it's clear in the chart that they are. Wave 1 was also a zig-zag, albeit a very large one. Wave 3 appears to be more of an impulse wave, though as a guideline that is normal (1, 3 and 5 appear to be impulses even though they are zig-zags). No wave retraces beyond the end of the preceding waves, which satisfies another criterium of a diagonal. Also, in a leading diagonal, the fifth wave has to move beyond the end of wave 3, so we should be breaking the 27th March top soon.
In a contracting diagonal, wave 5 has to be shorter than 3, 3 has to be shorter than 1, and 4 has to be shorter than 2; all good so far.
Wave 5 in a diagonal often ends at or slightly beyond (throwover) a line drawn from the ends of waves 1 and 3, projecting a price in the 0,20 range. It seems that the present fifth wave may be a zig-zag, with a triangle for wave B, and if we extend the A-part of that same wave, we'd also hit that same target. That target would also still satisfy the criterium of wave 5 being shorter than wave 4.
So, on the short term we should see an impulse wave moving up to the 0,20 area, after which we can expect a sharp down move; but let's deal with that when we get there.
Let's see what happens.
Disclaimer: This isn't trading advice, don't trade with what you can't afford to lose, etc. You know the drill.
Trade active:
So, this is an excellent moment for me (not you, only me, this is not trading advice) to open a long position. As long as we don't go any lower than this, we're still within the rules of a triangle serving as a B in this ABC up.
If not, the stop-loss is about as tight as it could get..
If not, the stop-loss is about as tight as it could get..
Comment:
A second after I wrote that, we broke back up through the trendline, so things are looking good. Now, we wait!
Trade closed: target reached:
Profit taken at 0.20, and on to new trades.
With such an extended last movement in a leading diagonal, I'll be looking for a good place to enter a short position after I have confirmation this move has truly ended.
With such an extended last movement in a leading diagonal, I'll be looking for a good place to enter a short position after I have confirmation this move has truly ended.