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Wave Analysis

CONFLUENCE TRADING | YOUR KEY TO ACCURATE ENTRIES 🥇 If you are struggling with the identification of accurate trading entries, you definitely should try confluence zones . Note: there are hundreds of variations of confluence elements. In this example, we will discuss trend lines and fibonnachi. ❗️To identify a confluence zone, the price must follow a trend line (it should match higher lows if the market is bullish; it should match lower highs if the market is bearish). Once the trend line is confirmed by at least two touches and consequent reactions , you can look for a confluence zone. 1️⃣Project a trend line and identify the next POTENTIAL touchpoint of the market with a trend line. 2️⃣Take the last impulse in the direction of the trend. Draw a fib retracement based on it (swing low to swing high in case if the market is bullish, swing high to swing low in case if the market is bearish). 3️⃣Take the previous impulse (it must be in the same direction as the initial one). Draw a fib retracement based on it. 4️⃣Look for a match of retracement levels of the last two impulses and a projected trend line. In case if two retracement fib.levels & trend line match, you found a confluence point. 5️⃣ Apply it as a safe entry point. You will get a perfect trend following opportunity. ❤️ Please, support this idea with a like and comment! ❤️ ⬇️ Subscribe to my social networks! ⬇️
Education
by VasilyTrader
24
Taking advantage of day gamblers and bagholdersDay Gambling & Bagholding makes up most of the activity in stocks I reckon. Not as big with Forex but still here. They allow people to optimise their returns. If markets were always fairly valued you couldn't really make more than 5% a year. And I say 5%, but to get there you'd have to not make any mistake. Perfection ==> 5%. No thanks! Day & swing gamblers, and bagholders, are here to transfer wealth. I describe how in this idea. I cut to the chase, I try keeping it as short as I can, but the subject does take a bit of explaining and I try to not skip important things. What do day gamblers do? - Exacerbate short term moves, move the price away from its natural longer term trend for example. - Hope to make money while paying to their brokers 25% of the money they risk as spread or commission. Roulette wheel takes 2.5%. What do bagholders do? - Sell out of their winners very quickly. The behavior of holding losers goes in pair with getting rid of winners. - And of course hold their losers. Bagholders that bought near the top do not add sell pressure to the pullback. - Bagholders also love to "buy the dip", when the price of something goes down, they buy. - Finally they sell at breakeven both when they hold a loser recovering, or when they are in the green and it pulls back. Can't really say for a fact this is what happened, but that's how I see it in a concrete example: FXCM says its traders average risk-to-reward is 1-to-0.57, on EURUSD in the period 2014-2015. That takes into account all those that have a high RR. FXCM typical gambler risk to rewards is probably closer to what I see on myfxbook, something ridiculous like 1-to-0.25. Even on Bitcoin that goes down 80% and up 8000% I can bet the typical gambler risk to reward is poor. People also "average down", sometimes they call it just that, sometimes they call it "dollar cost averaging". When they average down they increase their risk, all they care about is getting their money back. This is what we call a Martingale strategy. And yes, it is very stupid. And wipes out life savings once in a while. Academics polled people and found that in the general population - or maybe it was in a population of students - about 85% of people would rather take a small guaranteed win than a chance to get a much larger win (with of course odds multiplied by the amount were bigger than the flat win), and the exact same percentage would rather risk an enormous loss than simply take a loss. Prey ruminant mentality. They go for leaves (small wins), and they want to avoid losing at any cost because that means likely death. Compare this to a tiger that has a win ratio of 5 to 10% but gets huge meals providing several orders of magnitude the amount of calories he spent to hunt it, and they don't take silly risk, you'll never see a tiger jump in the violent river to go after prey. And this is why you have the famous: Wave A: A pullback with the majority still bullish (Mainstream media in the case of a bubble...). Bagholders that got in late are in complete denial. Bagholders that got in early enough often breakeven. Not an exact science, they do all kinds of things. I don't know many things that are 100% true in trading. Wave B: Bagholders are quite stressed out. You hear them scream things such as "DIAMOND HANDS", "LAST TIME THEY SAID", "THE BULL MARKET IS BACK". Price does not simply continue up in the presence of bagholders. It tops usually at 78.6% to 100% fibonacci retracement. Wave C: Most bagholders admit we are in a bear market. By the bottom of C, nearly everyone realizes (even the slow ones) that WE ARE IN A BEAR MARKET. Typical extensions are of 1, 1.618, 2, 2.618 (commodities). Wipes out the bagholders, in mainstream markets this is very often "the little guy" and they whine about manipulation (natural selection => great traders end up rich) It has always been like this and data shows they are the ones selling. But they still cry "manipulation" and whine and never learn. This is very typical. Not that entries matters that much, but avoiding getting sucked in "back to normal", and expecting lower prices, can help. I can point out plenty of other examples: Wave C has many names. Capitulation, "AAAAAAAAAAAH", make it stop god oh make it stop, this is BS, as well as when will it stop? When it stops is when it finds the majority of bagholders breaking point. Take a slow trend that went parabolic, the breaking point of the baggamblers will often be spread between the top and the start of the vertical move. This is not precise at all but to get an idea: In theory if 71% of the market is made up of bagholders and 71% of those "take their profit" we can estimate a retrace of 50% (71% of 71%). 90% of people are bagholders I think, but survival selection means the number will be lower in the markets. Day gamblers also have their trends and ABCS. No need to repeat what I already said about bagholders, much of the same applies to day day gamblers. So with much research, knowledge, practice, in theory one should be able to take advantage of day gamblers to get really good precise (enough) entries and exits. Thank you day gambler! Not only do they feed brokers ridiculous amounts (10 times the roulette wheel amount) allowing MY costs to go down, they also improve MY bottom in another way which is with better entries and exits. Thank you day gamblers! You truly are altruists. In this case... We can note that the price after bouncing between 1 and 1.618 dropped and bounced again on the "1" level. Bagholders breaking even? Rather than just buy at a vague price, it is in theory possible to use swing bagholders and day gamblers to have a very good entry. Does not always work. And no point being greedy here, it's already tight enough. Enter at a likely reversal price = better entry = better RR. Stop can be put way way far, further than the day gamblers capitulation, and even the swing bagholders, giving it many chances, and on a high timeframe it will still be a high payout for a small risk. The goal is not to look for perfection, but to progressively improve risk rewards thanks to others mediocrity and gambling mentality. On top, I repeat, of already all being at an advantage compared to decades ago, thanks to daygamblers taking the volatility in the teeth and cratering spread costs. Warren and me, deep down we do the same thing: In a concrete example, a trade I posted recently:
TVC:GOLDEducation
by MrRenev
EW FIBONACCI Ratios, FIB Retracement and Extension application !In this post, I'm going to focus on Fib Retracement and Fib Extension Ratios by Elliott Wave, and show you how to best use these tools. Fibonacci ratios are mathematical ratios derived from the Fibonacci sequence.The Fibonacci sequence is the work of Leonardo Fibonacci. Fibonacci sequence is used in many applications, movies and photography, space studies, stock market actions, and many other fields. Fibonacci is a proven approach for measure price movement relationships. For Elliott heads, it means Fibonacci numbers are tools to help guide us in our interpretation where we think price movements will go. The most common Fibonacci ratios used in the stock markets are: 1 - 1,272 - 1,618 - 2,618 -3,618- 4.23 (extension) 0.236 - 0.382 - 0.5 - 0.618 - 0.786 (retracement) Let's start with Elliott Impulsive Wave rules ! Wave 1: the beginning of each wave and retracet with Wave 2: may never retrace deeper than the beginning of wave 1 Wave 3: often the longest, but never the shortest Wave 4: may never retrace below the top of wave 1 Wave 5: x Fibonacci ratios : Wave 2 The most common retracements we look for in a Wave 2 pullback are either a 0.5 or 0.618 retracement of Wave 1 We expect only 12% of Wave 2 to hold 0,382 retracements of Wave 1 We anticipate 73% of Wave 2 retracements between 0,5 to 0,618 We anticipate 15% of Wave 2 to retrace below the 62% Wave 3 Wave 3 is related to Wave 1 Fibonacci relationships: Wave 3 is either 1,618 length of Wave 1 or 2,618 the length of Wave 1 or 4,236 the length of Wave 1 The most common multiples of Wave 1 to Wave 3 are the 1,618 and 2,618 If Wave 3 is extending, we typically look for 4,236 or higher Only approximately 2% will a Wave 3 be less than Wave 1 We anticipate 15% of Wave 3 trade between 1 and 1,618 of Wave 1 We can anticipate 45% of the time Wave 3 will push to between 1,618 and 1,75 We can anticipate 8% of Wave 3 will extend beyond 2,618 or higher Wave 4 Wave 4 is related to Wave 3 0,236 of Wave 3 or 0,382 of Wave 3 or 0,50 of Wave 3 or 0,618 of Wave 3 We can anticipate only 15% of the time Wave 4 to retrace between 0,236 to 0,382 We can anticipate 60% of the time Wave 4 to retrace between 0,382 and 0,5 We can anticipate 15% of the time Wave 4 to retrace between 0,5 and 0,618 We can anticipate 10% of the time Wave 4 retrace 0,618 or greater Wave 5 Wave 5 has two relationships. Wave 5 has a direct correlation to the Fibonacci relationship of Wave 3 1. If Wave 3 is greater than 1.62, or extended Wave 5 is a 1 to 1 or 1.618 of Wave 1 or 2,618 of Wave 1 I don't know any statistics, but in my experience a 1.618 or 1 to 1 is the most likely 2. If Wave 3 is less than 1,618. Wave 5 will often overextend.The ratio of Wave 5 will be based on the length from the beginning of Wave 1 to the top of Wave 3 Extended Wave 5 is either 0,618 from the beginning of Wave 1 to top of Wave 3 or 1,618 Unfortunately, my english is not so good and I work with google translate, but if you have any questions I will be happy to answer them . ➡️If you like my posts smash the like👍👍 button, comment or follow me. It helps me to publish more free education, also on request ⬅️ Fib retracement and Extension application follow 📚
Education
by TR7z
114
PLG 63% increase.PLG 63% increase. The analysis is based on an important ATR rule. It is the relationship between the ATR value and the resulting wave sequence. It is now accepted that the value of the ATR can give a predictive signal for subsequent movements. If the ATR is high, we expect high market volatility. What is less well known is the impact of ATR on the size of the wave sequence that will form later. The theory here is simple. The basic principle is : the percentage change in the ATR of the previous wave sequence gives the percentage size of the next wave sequence. In our case, this means that the size of the ATR change of the previous wave sequence is 23.71%. The size of the next corrective wave sequence will be 23.71% exactly according to the rule. Now we see this. We have reason to believe that the second wave section of 23.71% is the last corrective wave we saw. We therefore expect a rise from the local bottom of this. Even though the current fair value of PLG shares is 4.6 usd but the ATR based calculations give a primary target price of :7.6usd with a secondary target price of : 11.28 usd we are buying the stock considering the good return risk.
AMEX:PLGEducation
by meszaros
Wyckoff Basics part 2After my last educational wyckoff post - I had a lot of comments, questions and so on. The idea was to post the basics and show the concept - there has been a lot of the overlay, breakdown and other people jumping on this. It was a move we called on the 18th of March (see the "they blew up the rocket" post). In terms of some simple education, Wyckoff is deep and possibly too deep for newer traders. What I was trying to highlight was the existence of such techniques. In part one; I only covered the point of how the distribution phase was playing out in Bitcoin. In this post, I will share some additional depth - for those of you already familiar with Wyckoff techniques you already have this. So we are not covering here (volume, how to identify or any of the more advanced stuff or terms like creeks or mark-ups and downs) Just another simple intro to the basics & a step up from post one. So if you have not seen the first post; check it out here by clicking the image. 4 Major types of schematics The Accumulation and Distribution Schematics are a major part of Wyckoff’s work, These schematics are broken down into 2 patterns for accumulation and 2 for distribution. These sections are then divided into five Phases (A to E), along with multiple Wyckoff Events - we will cover this later. Distribution schematics So in the previous post & it was fortuitous that Bitcoin was a near textbook example of the distribution schematic #1. The second type of distribution schematic looks like this; As you can see, there are a lot of similarities & it can be confusing, but this is where it's best to dig deeper into the concept, why volume plays a big part in Wyckoff techniques and gain an understanding of the naming convention for each of the events inside. ** We have a naming convention key below ** Accumulation As well as distribution you also have accumulation and this also has 2 (major) schematics; #1 And #2 ====================================================================================================================================== Key; The first phase or ways to identify a schematic forming is with what is called a PS (Accumulation) or PSY (distribution) - this is basically the change of character as the trend moves towards a schematic; Preliminary Support (PS) and Preliminary Supply (PSY). The first significant reaction that occurs after a prolonged rally that indicates budding supply showing up. You then have a BC or SC - buyer climax / sellers Climax; the obvious BC in an uptrend suggesting institutional operators cashing out. and the inverse with the SC. The next major event is the AR - Automatic reaction (rally) - The reaction that occurs after a Buying Climax. It occurs without previous preparation, hence the word “automatic.” and in layman terms it's the exit of large positions after a climax (SC and BC) event. ST next - this is a second test (ST) A name given by Wyckoff to the reaction following Automatic Rally, (or rally following the Automatic reaction.) If that test is associated with small range and light volume — it increases the likelihood that the previous trend is over. Next a move down if it is accumulation would be a SOW - this is "Sign of Weakness" and inverse we have SOS "Sign of strength" In distribution - you then have two major differences over the accumulation schematic; UT = Up Thrust and a UTAD = UP Thrust after Distribution. For distribution you have a spring, think of this like the last drop before moving up rapidly out of a schematic on the Bullish side. You then have "Test" phases usually of the support and resistance levels (zones) created by the schematic as shown in the images above. And finally you have LPSY for distribution Last Point of Supply - A point at the end of the process of distribution where the Composite Man (Large operators) recognizes that demand forces have exhausted themselves and it is safe to start marking down prices. Last Point of Support (LPS) which is the accumulation equivalent - A point at the end of the process of accumulation where the large operators recognizes that supply forces have exhausted themselves and it is safe to start marking up prices. This is still only the basics, not looking at phases or volume or anything else yet. It's worth going away and studying this in a little more detail to get familiar with the concepts and terminology and in the next post I will cover the phases. ======================================================================================================================================= I know a lot of you readers are here purely for the crypto/BTC calls made - and another logical reason we are still liking a slow move down at this level, comes in the current DXY situation. See this post below as to the current situation there. (the relevance might be small - But understanding the forces at work, with DXY to BTC. Is actually useful). Shorter term strength = will aid BTC slow moves. Disclaimer This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
COINBASE:XLMUSDEducation
by Mayfair_Ventures
23
BTCUSD: 2 simplest strategies to buy & sell in any time frame1. Buy: 1.1. In any time frame we buy when price is seemingly plunging & RSI is gaining strength. Here we "MUST" watch only. 1.2. Then, a consolidation starts during which we can be almost sure that there will be no more descending move. 1.3. Being familiar with Harmonic Patterns during growth, consolidation & downturn cycles would of utmost help. 1.4. Next is a rhyming of HHs & HLs and RSI (14) is implicating the end of a previous cycle & the new coming one. 1.5. With RSI (2) you can see at least 2 very low figures less than 10 rising and falling followed by the 3rd HL which can be a trigger. 1.6. The latter is true in daily & weekly time frames when Elliot wave counting has been done. 2nd & 4th Elliot's Corrective waves out of 5 impulsive waves reacting to the most important corrective fib levels while price is so close to the "dynamic logarithmic support" of weekly time frame price channel. 2. Sell: 2.1. In any time frame, we sell when price is seemingly going higher while RSI (14) is getting weaker. 2.2. In weekly time frame price can touch or cannot touch the "dynamic logarithmic resistance" in the first nearest distance or a complete touch with price channel. 2.3. While in daily it is showing weakness specially in the second touch with channel. 2.4. This is most true when the latter is accompanied by price getting closer or touching "dynamic logarithmic resistance" of weekly price channel while in Elliots wave counting either 1st impulsive wave, or the 3rd & the 5th ones are formed. 2.5. This (RSI Weakness coinciding with the 1st, 3rd & 5th Elliots) can be rechecked by setting fib projection levels. Volume & the total market index for weekly and daily time frames need to be checked as well. What has been said is very easy & obvious in a way while very complicated in another way. One needs to find its own trading/investing style which best suits his personal needs & capabilities. Any strategy has to be addressed only if there is a plan in advance. A plan has a natural deviance from reality all the time & might not yield best returns on investment, but it guarantees survival & resiliency of the business. This is for learning purposes only and is not a financial advice.
Education
by Morteza-Emzajerdi
1
Trading Basics Part 1:How Candlesticks Work! Hello,Traders! Japanese Candlesticks are thought to have been invented by the Japanese rice traders And then made their way into the West where they were used for stocks, forex and commodity trading. Reading candlesticks is quite easy: the body represents an area that indicates the price distance between the open and close of the candle, while wick’s ends indicate the full magnitude of the movement in-between open and close. Thus, when picking the timeframe for your chart, you are deciding on how much time will be contained between open and close of each candle. If open is below the close, the candle is bullish , and if open is above the close, the candle is bearish , which is usually represented by different colors of the bodies and wicks on the chart, typically, green and red. Some of you might ask me, why am I explaining things that seems to be obvious and self evident, yet my experience of Coaching, paints a different picture, with thecandlesticks being undervalued and misunderstood by many, despite them being the staple of technical analysis . In my trading strategy, which is based on multi timeframe top-down technical analysis , we examine multiple timeframes, from 1 week to 1 hour, going from higher to the lower timeframes. Looking for strong levels on weekly and daily and for patterns and confirmations on 4 hour and 1 hour charts. Which means that we are opening 1 week/1 day candle like a Russian doll, finding multiple candles inside the other. We enter the trade only if we are getting the same bias on all timeframes that were of our interest! If you found my post helpful and interesting, please, like comment and subscribe! Thank you!
Education
by TopTradingSignals
13
Wyckoff Price Cycle ExplainedAccording to Wyckoff, the market can be understood and anticipated through detailed analysis of supply and demand, which can be ascertained from studying price action, volume and time. As a broker, he was in a position to observe the activities of highly successful individuals and groups who dominated specific issues; consequently, he was able to decipher, via the use of what he called vertical (bar) and figure (Point and Figure) charts, the future intentions of those large interests. An idealized schematic of how he conceptualized the large interests' preparation for and execution of bull and bear markets is depicted in the figure above. The time to enter long orders is towards the end of the preparation for a price markup or bull market (accumulation of large lines of stock), while the time to initiate short positions is at the end of the preparation for price markdown.
BITSTAMP:BTCUSDEducation
by Lzr_Fx