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Elliott Wave Counting with EG

  • #941
  • Nov 1, 2007 6:40am Nov 1, 2007 6:40am
Refer to Chart on Post # 939

Using EW and the Guideline on Wave Extentions plus the help of MT4 Fibonacci Extention Tool, End of Wave 3 is projected at FE 161.8.

Seeing Wave 3 to be extended, a relationship with Wave 1 is assumed to be 161.8% at the minimum. This is then drawn and we come up with FE 161.8 @ 241.69

On the side I have been observing how price travels in a particular direction based on a Breakout System ( previous day's Hi-Lo Range ) and I have observed it to stop at specific Fibonacci Levels like 38.2, 50, 61.8, 76.4 and 100. More often , prices stops at 61.8 and 76.4.

Another aspect I have been studying and observing too was how Price relates to Pivot Points and various Support and Resistance Levels.

In the case of GBPJPY now, Price is moving upwards.

1. Based on EW Count, it is developing to finish a wave 3 inside a wave 3 gopinf up.
2. Referring to Trendlines, We can see that a 4 hour Bullish candle has already formed ( opened and closed above a Daily downward trendline. This signals more upside movement, although a bearish retracement may still be experienced. But the general longer term direction would be upward.
3. Based on the Break out System Fibo Levels for Price are the following:
50 @ 241.76
61.8 @ 242.14
76.4 @ 242.60
100. @ 243.35
4. Pivots and Support ?Resistance Levels -
Price is above the Weekly, Monthly and the Daily Pivots
Daily Resistance 3 is @ 242.42
Weekly Resistance 3 is @ 242.42 also
Although EW Count conservatively places Wave 3 to end at 241.69 which is barely 50% in the Breakout system, I am inclined to see price going or surpassing these levels and approaching Weekly R3 Level @ 242.24 which is nearer to 61.8% of the Breakout System.

Better Post this now as price is already climbing
  • #942
  • Nov 1, 2007 7:26am Nov 1, 2007 7:26am
to continue....

On the use of the Fib Extention Tool: I came up with a sort of guideline which is listed below:

Wave 3 is FE 161.8 to 200.0
Wave 5 is FE 261.8 to 300.0

Only when Pips4life asked how I used the Fib Extention tool did I realize that I was missing out on the Heart of the Extended Wave Guideline and the Various Fib Levels to note depending on which wave was extended.
For Projecting Impulse Waves 3 and 5,
a. First target will be FE 61.8 specially if wave 1 is obviously extended.
b. then observe how wave 3 develops. If 61.8 is achieved without completing the 5 sub waves of the wave 3, then Tp should be adjusted to 161.8 up to 200.0
c. You can either let the trade continue to run or exit at end of wave 3.
d. Opportunity to counter trade and trade the wave 4. for newbies, it is not recommended to trade live with the counter trend. DEMO Trade suggested. wave 4 normally retraces 38.2% of wave 3. One must learn to spot the size and breath of the corrective wave in relation to the overall wave structure. Then apply the Fib Extention Guideline to Project Wave C. I can actually do this with each turn of the wave keeping in mind whther you are projecting an motive wave or a corrective wave.
e. then since wave 3 was extended, you now have to things to watch for with regards to wave 5. it can either be equal to wave 1 so target would be FE 261.8 to 300 or it could also be FE 425 if there are signs that wave 5 is developing into an extended wave.

These are all still under study. I can not say that this is a sure way of interpreting the results of how I use the tools and apply what I think is EW Principle. SO it would be nice if somebody else would test these and share with us their results too.

EG
  • #943
  • Nov 1, 2007 7:48am Nov 1, 2007 7:48am
Bearish Engulfing Candle forming on the 1 hour chart

A Bearish PinBar may finish in the 4 hour Chart.

In addition to EW Count Guide..

I am thinking of this as just a wave 4 retracement before a final leg of wave 5 going up is achieved towards the 245-247 range.

EG
  • #944
  • Nov 1, 2007 8:54am Nov 1, 2007 8:54am
hi el grande,
I have learn alot from your EW count, you are very good in it!! I am trying to learn EW counts too, have been learn for few months but still not good in it!! But what i think EW counts are truly reliable since the R:R ratio is very good for trading! Since english is not my mother language, I have been read the Prechters Book so many times, it seems like this book is my bible! However there's few point i still not very understand, would be very grateful if you can help me!!!

1) Since the golen rule for wave 3 can never be the shortest!!!
So why it has stated that if wave 3 is shorter than wave 1 ,then expect wave 5 to be the shortest and should be shorter than wave 3? Wave 3 cannot be shortest or wave 3 can be shorter than wave 1???

2) Up until now, I still can't distinguish what is motive and what is impluse! Are'n't they are the same???

Thx for help!!!

Carman
  • #945
  • Nov 1, 2007 9:46am Nov 1, 2007 9:46am
Hi EG,

Refer back to my chart that theorized a huge downward ZigZag, and I thought we had begun the 5-wave big C down. That would appear to be nullified by what would have been a 2-wave going too high, above the start of 1 (the end of B).

But look at UJ. That chart is still playing out the big zigzag pattern. There's a possibility it will drag GJ down with it... Alternatively, of course, the GJ may well be finishing a 4-wave and now on to the 5-wave push upwards, and THAT wave will drag the UJ upwards into ultimately what the GJ looks like right now, kinda like a big flat wave.

If nothing else, this would explain the volatility in the patterns. A big tug-of-war between the GJ heading upwards, and UJ still showing the bearish zigzag potential. Add to that the GU at new recent highs (all-time??), then will GU continue upwards or it is primed for a big fall too, dragging GJ with it?

Still working on the big picture...

Pips4life
  • #946
  • Edited 1:09pm Nov 1, 2007 10:48am | Edited 1:09pm
carforum and Pips4life..


will reply to you a little later.

Chart is offered as an alternative count.

When my charts get too busy, I open up a clean chart and start labelling from there again.

Helps me get a clean view again and prevents me from getting distracted by indicators.

****
Assuming my higher TF EW Count is correct, red 33 is ultimate objective when Aqua Wave 4 finishes a corrective Flat wave.

Notice that Aqua wave 2 is a sharp Zigzag wave. We therefore assume that Aqua Wave 4 will be a complex Wave.

Now I watch the charts as the wave develops. Oftern monitoring the lower TFs to see how the Higher TFs evolve.

I could be right or I could be wrong. What is important to me is I will be able to determine where I made a wrong turn or a wrong count and I should be ready with alternative counts once a current count fails.

This part of having readily available alternative counts does not happen often enough as this definitely takes a lot of my time.

But I am working on being able to assess wave counts faster than I used too.

EG
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  • #947
  • Nov 1, 2007 12:16pm Nov 1, 2007 12:16pm
Thanks sir for the information, i really appreciate that sir. moreso, i still need were to get elliotwaze software. I will go to link to you gave me to study the elliot wazes. Thanks again for the great work.
Quoting el grande
Hey Victor.

Better remove your email address on your post otherwise you will probably be swamped with spam when spammers pick up your address here.

If you want to learn EW, you can do a web search with the topic "Elliott Wave" or you can first try out http://www.elliottwave.com

This is one of the best places to get your EW education started. They have lots of free material. but getting hold of the actual book "Elliott Wave Principle, Key to Market Behavior" would be a plus.

You can also check out the threads by fixme1too and itme here in forexfactory. I am sure you will be able to pick up a lot from them too.

EG
  • #948
  • Edited 1:54pm Nov 1, 2007 1:39pm | Edited 1:54pm
Possible Wave B Up of a flat corrective wave.

I have assumed that this is a wave 4 and that it is a sideways corrective wave and not a Simple Sharp Corrective wave normally associated with Zigzags.

So if this is a corrective wave, then wave A ( first leg of a corrective Flat has to subdivide into 3 waves which we can see labelled on the 2nd chart. It does not necessarily have to be a C = A. But normally C > A

This is followed by a B wave which subdivides into 3 waves also where C= A.
As you will see in the chart I have identified end of B wabve as 241.04

Then we should see this price going back south and lower than previous 237.92

Here we can have a C = A for this big A and C.

EG
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  • #949
  • Nov 1, 2007 2:10pm Nov 1, 2007 2:10pm
Quoting carforum
hi el grande,
I have learn alot from your EW count, you are very good in it!! I am trying to learn EW counts too, have been learn for few months but still not good in it!! But what i think EW counts are truly reliable since the R:R ratio is very good for trading! Since english is not my mother language, I have been read the Prechters Book so many times, it seems like this book is my bible! However there's few point i still not very understand, would be very grateful if you can help me!!!

*** I can not really say I am very good at EW Counts. I am still learning it. But we can help each other learn the EW Principles. Stay around and try to label your charts then post them here. we can all have a peak at what you and I are labelling our charts and we can discuss how and why we labelled them as such.

1) Since the golen rule for wave 3 can never be the shortest!!!
So why it has stated that if wave 3 is shorter than wave 1 ,then expect wave 5 to be the shortest and should be shorter than wave 3? Wave 3 cannot be shortest or wave 3 can be shorter than wave 1???

Given 3 waves 1 3 and 5
If wave 3 is shorter than wave 1 then wave 5 must be shorter than wave 3
In mathematical terms if B is less than A then C must be shorter than B

A = 1
B = 3
C = 5

C < B < A

Given that B is shorter than A
And B cannot be the shortest among ABC
Then B has to be longer than C to satisfy the second statement.
If B is shorter than C, then B becomes shorter than A and C and B becomes the shortest among the 3. This statement will not satisfy the criteria that B cannot be the shortest among the 3.

However, if C is shorter than B, then since B is already shorter than A and now C is even shorter than B, then B is not the shortest. It is C which is the shortest among the 3. So this is a valid statement that satyisfies the Guideline.

Of course that is aside from the Possibility that B is the longest among the 3.

I hope you did not get lost in this explanation. If you did, just holler and let me know. I will try to find a better example again.

2) Up until now, I still can't distinguish what is motive and what is impluse! Are'n't they are the same???

If you have Prechters Book, check page 25. He has it as :
Motive (Impulse)
Corrective (Zigzag)

So basically I would say,
Motive waves are Impulse waves
Corrective waves are Zigzag waves.

Thank you for bring that up. I used to wonder about it too. But never got around to verifying it. Now I am sure as I looked it up in Prechter's Book.


Thx for help!!!

Carman

I hope I have Answered your questions enough for you to understand what they mean.

EG
  • #950
  • Nov 1, 2007 2:23pm Nov 1, 2007 2:23pm
Looks like I got a Bomber here.

This is what I think is a failure to recognize wave size and proportion.

This could possibly be the completeion of the zigzag of the sub wave b inside the Big B wave Up. where C = A

EG

update : or maybe not . Unless price goes lower than 238.78 which it is at that level now. No break means wave 2 then UP. with break then it is finishing the wave C down of the zigzag sub wave b of the Big B wave.
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  • #951
  • Nov 1, 2007 2:38pm Nov 1, 2007 2:38pm
Price continued downward but stopped and bounced on the 240 EMA on 15min chart.

checking the 1 min chart, I think I see 5 wave subdivision. this could the the reversal to the Upside with C just a little over 61.8 % of A.

EG
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  • #952
  • Nov 1, 2007 2:43pm Nov 1, 2007 2:43pm
Quoting victa123
Thanks sir for the information, i really appreciate that sir. moreso, i still need were to get elliotwaze software. I will go to link to you gave me to study the elliot wazes. Thanks again for the great work.
If you are serious about learning Elliott Wave Principles, I do not suggest that you get a software. Once you have the software, you will have less drive to really learn EW Principles. You will grow dependent on the software to do the core analysis for you . But that is just my opinion.



EG
  • #953
  • Nov 1, 2007 2:48pm Nov 1, 2007 2:48pm
Quoting pips4life
Hi EG,

Refer back to my chart that theorized a huge downward ZigZag, and I thought we had begun the 5-wave big C down. That would appear to be nullified by what would have been a 2-wave going too high, above the start of 1 (the end of B).

But look at UJ. That chart is still playing out the big zigzag pattern. There's a possibility it will drag GJ down with it... Alternatively, of course, the GJ may well be finishing a 4-wave and now on to the 5-wave push upwards, and THAT wave will drag the UJ upwards into ultimately what the GJ looks like right now, kinda like a big flat wave.

If nothing else, this would explain the volatility in the patterns. A big tug-of-war between the GJ heading upwards, and UJ still showing the bearish zigzag potential. Add to that the GU at new recent highs (all-time??), then will GU continue upwards or it is primed for a big fall too, dragging GJ with it?

Still working on the big picture...

Pips4life
Hi . I guess it depends on where you have your wave counts really.

But with my wave count ( which does not necessarily is correct - meaning it could also be wrong ) price is in a wave 4 inside a wave 3 going up. and this sub wave 4 inside wave 3 is a corrective flat .

So I expect GBPJPY to be ranging probably till Monday to complete this.

Then it will be on its way to 245-247 Range.

EG
  • #954
  • Nov 1, 2007 2:52pm Nov 1, 2007 2:52pm
Does anyone around here have any reference material relating time with Wave development?

I think I have somehow gotten a sort of grip on price development. It is the time factor that I am really having a hard time specially on the development of the corrective waves.

Maybe somebody could be kind enough to share some references or at least lead me to the direction where I can read up on this Time factor.

Thank you
EG
  • #955
  • Nov 1, 2007 2:58pm Nov 1, 2007 2:58pm
Price has continued to come down.

Let us see if this stops at the FE 100.0 @ 238.11

Then a Gartley Develops in the 15min chart

EG
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  • #956
  • Nov 1, 2007 3:02pm Nov 1, 2007 3:02pm
incidentally, Daily S1 is @ 237.81

Candle lowest part for now is at 237.97. almost there

Daily 5 SMA is @ 237.21
Weekly 5 SMA is @ 236.95
Daily S2 is @ 237.05
Monthly Pivot @ 236.96

Let us ee if price breaks thru that thick layer of Support


EG
  • #957
  • Nov 1, 2007 7:04pm Nov 1, 2007 7:04pm
Price has continued to go Down probably reaching end of wave 34 red level @ 235.22 to fit into a wave 4 Guideline.

Although Maximum potential dip of a wave 4 is till the end of wave 1 mocassin @ 234.33

Next we have to watch how wave 4 develops. Looking at the 1 hour chart, we can see an unfinished Zigzag wave.

Now I am thinking that if I was watching this 1 hour chart last night when the big drop happennedI should have seen this better and realized how it was supposed to develop based on EW Rules.

I was looking for a FLAT Corrective wave.

I knew that Leg A of a flat corrective wave was supposed to divide into 3 waves.

Instead of trying to find those 3 waves or insist on making that first leg down fit into a 3 wave structures, I should remember to rely more on at least the 1hr or the 4 hour charts when verifying wave counts and structure as imoportant as this.

Now on a 1 hour chart, it would seem that leg A and Leg B of a Zigzag wave have been finished. we need to have this zigzag wave as our Leg A of the flat corrective wave of this wave 4 Mocassin.

Since we now have the wave A and B points, we now draw the Fib Extention tool to Project the C=A Form

Our targets would then be as follows
FE 100.0 @ 236.58 C=A
FE 127.6 @ 235.59
FE 161.8 @ 234.36 C = A x 1.618

Watch your Oscillators. Check for oversold levels.

A negative Divergence found in a lower time frome could signal as a heads up that a reversal in this smaller time frame which would represent Peaks and Dips of the sub waves to complete this wave 4 may show.

Therefore, combining all these information plus what else you see on your charts, one will have a more or less subjective opinion on whether or not a reversal has began.

Note that if a wave wave impulse or motive wave has began, it is best advised to wait for the 1st 5 waves to finish representing the 1st sub wave of the wave 5 up and also wait for the pullback or reetrace representing sub wave 2.

It is best advised that A trader trades the Wave 3 and the wave C.

The pull back should have the signs of being a wave 2 to maximize profits.



hhhhhhmmmmm.... very easy to say

Admittedly..... I have a long way to go still until I can fully implement this in my trading strategy and planning.

Going back to this trade, we would then expect now to continue going down until price reaches 236.58 and maybe lower towards 235.59 then see it go up again towards 241.35 ( trying to re visit a previous high ).

It is possible for this to go higher than 241.35 resulting in an Irregular or expanded flat corrective wave which would be toward 242.48 and 243.17.

Then expect price to go down again.
- if we have an irregular flat, then C wave should be 161.8% of A
- if we have a regular flat corrective wave, then wave C will just slightly go lower than wave A which would basically mean we have C= A.

Let us ee how this Pair evolves in the next days or weeks.

EG
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  • #958
  • Nov 1, 2007 7:27pm Nov 1, 2007 7:27pm
A shot at forecasting.

EG
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  • #959
  • Nov 1, 2007 7:59pm Nov 1, 2007 7:59pm
Ranging Friday or is it a Reversal?

Scenarios on the chart

If Price does not go lower than 237.60 and this retracement is around 61.8 to 100% retracement to 237.60 but no lower than this..... then we are in for a Reversal and will likely be on our way up towards 241-242.

However, if price goes lower than 237.60 then we are still in a ranging expanding wave 4.

EG
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  • #960
  • Nov 1, 2007 8:12pm Nov 1, 2007 8:12pm
I am getting more inclined to believe that we have seen a reversal.

So waiting for a pullback equivalent to a sub wave 2 of a sub wave "a" of the Big Wave B Leg Going up of this wave 4 flat corrective wave.

Most likely a 61,8 or 78.6 up to 86% retracement for this volatile pair.

EG
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