Rao Journal: Elliot Wave Analysis

Halo, I'm Rao, nice to meet you here. It's my another attempt to organise my Forex trades.

I used to trade on EURJPY and EURUSD, less frequently I use GBPUSD, GBPJPY and NZDUSD. I prefer to analyze a small number of instruments in order to make it thoroughly and also save spare time.

My trading system isn't based on complex combination of indicators and oscillators. I pay attention to
- Elliot Wave
- Fibo Retracement
also I add Stochastics to my chart, it seems for me helpful on timeframes >1H.
I'm scalper, the majority of my positions are intraday.

My forex trading experience on live account is lasting a little bit more than year and a half. My broker is Instaforex.

In this thread I'll try to accumulate my view on the current market situation. I'm looking for a good piece of advice, criticism or admiration Let's see if I'm worthy.

The chart tells me that at the moment we're coming to the end of a great bullish wave lasting from the 1st decade of July.
I can't say confidently now if it's completed or not. Wave count on the 1H chart seems to have been finished, but we should be ready for another bullish movement towards previous maximum (5.Jun, 139.24). I think this move can be a part of an expanded 5th wave (on 1h chart).

EU seems for me clear by now: on daily chart there's a 5-wave formation, and we're ahead of a retracement, which has already started.
On 30min chart we can notice completed 3 waves, I suppose they'll become part of the first wave in the retracement.
On Monday I'm waiting for a clear retracement to wave 3 and will short EU.

I'm looking through GJ chart right now. Take a glance at my wave scenario, it seems we can get ready for a retracement till 146 zone.
Never the less, we should keep in mind two things:
1. The 5th wave can become expanded (but this variant isn't likely due to correlation with GU and EJ);
2. We'll try to find if the last wave has completed on Friday.

Analyzing 4h chart amde me think that the bullish movement which we saw on gj during last 6 months is pretty close to the end.
You can see here detailed view on the 5th wave, which is already completed.

As I've mentioned yesterday, I can't tell exactly by now if the bullish move on EJ has come to an end. that's why I trade on minor TFs.
When the market opened, EJ finished 5-wave downward structure. at the moment the price is in a correction phase. I think that after the price goes higher 138.35 we can see another bearish wave.

PS. I made +40 pips with sell EJ @ 138.48 S/L 138.73 T/P 138.08 (it's the wave 5 on the chart).

The pattern I showed several hours ago is proved by now: another downward wave has already formed.
If current move is just a correction to the previous bullish impulse, it's possibly over. But the question is open if EJ is going to climb higher. As for me, it's likely.

Huh, catch another update

Well, the price went lower than previous min level (137.56, 15:40 on this chart), it means that at the moment the 5th bearish wave is forming.
If I'm right, now we are ahead of the completing this wave. Keep in mind that 3rd or 5th wave (on 1min chart) can become expanded, but I can't predict it exactly.
Never the less, after this wave is completed, I'm going to trade on correction. We should remember, that 3rd wave was shorter than 1st, so 5th is to be shorter than 3rd.

As I mentioned in my previous message, we should have looked at the price action on EJ attentively in order to find out if the last wave is shorter or longer than previous one. So, the last wave turned out to become approx. x1.382 longer. I expect EJ moving lower 136.95, as wave 3 is to be completed. Possibly, it'll stop @ 136.8 level.

I put a sell order with s/l 138.03 and t/p 136.98

PS. I hope you find this thread useful. I'll be pleased to hear a feedback from you.

Good morning!
While I was sleeping another profitable position has been closed. More over, the pattern I drew is still actual. Wave (5) of 3 is expanded, it's clear by now. Even the first part of it had touched my T/P level. If my wave count is right, EJ will go even lower, somewhere between 136.45-.25.
I put another sell order with S/L above 137.27.

After that, a correction to wave 3 should be in place. Maybe it won't be correction and we'll see another max, but today I have a bullish bias in my EJ pattern.

Well, I wasn't right and did a mistake in counting waves in the last bearish wave. I had doubt, and these doubts weren't senseless. Half of my position was closed by S/L, the other part of it I closed manually later with +6 pips.

Also I hesitate in analyzing the latest bullish move. It can be interpreted as 3-wave or 5-wave construction, I marked the zone when the question appeared with a coloured ellipse on the chart.
If we look at the situation from a bigger timeframe, we can notice different variants of following move. As you remember, we have a chance that EJ will return to its previous max level on daily chart, I mean 139.24 value.
Right now EJ is unclear for me. The continuation of downtrend will be proved only after breaking 136.46 level.

Huh, the 5th wave is on it's way down. At the moment 3rd part of it is forming, it means that after correction we should be ready for another downside move.

As I see the 4th wave is forming, after the 5th wave I wait for a good correction to this bearish move.

My pattern has proved during the Asian session. Now it seems for me that the last bearish wave in this impulse is almost completed, so I'll try to make some pips on correction move to the upside.

Well, the final bearish wave was more strong than I expected. But in an hour price managed to find its bottom and begin upside move. I closed my buy orders which I put several hours ago @ 135.07.
Now EJ is in correction mode to the first bullish wave. I plan to place buy orders again when the price touches Fibo retracement levels. My initial target is 135.85

A strong upside move is on it's way It's hard to describe this move in waves, as I see, it's still the 1st wave to the upside.

In 4 hours the market will boom-boom-pow by Bernanke, I think we'll see a bearish move on the charts as Fed leader has optimistic prognosis.

I see on EU ideal 5-wave structure. Analyzing from the point of view of the Elliott theory, we should wait for a correction move to the downside.

My pattern has proved 7 minutes after I made the previous post. I put a buy order on EU waiting for the 3rd wave to the upside. My S/L is below 1.4088

3rd wave on EU seems to have been completed. I think that downside move will continue now, or at least it'll retrace.