I can't wait... 
"Markets are never wrong; opinions are." - Jesse Livermore
The BF Fork.
The BF Fork is a combination of the E line or the first fractal level past the red Teeth Line and a trend line. You may recall that the E line and the BW Fractal line may often occur on the same fractal. Either way we extend a horizontal line from the E Line Fractal or the BW Fractal to the right. We know that when the price breaks either of those levels, or both, that a trend reversal has occurred.
The HH HL LL LH count confirms this with the E line and the BW Fractal line can give an early warning or be used by itself.
Now if we look at the last two significant fractals and use the Tom De Mark method of drawing a trend line, using those two fractals, we find the trend line is the handle of a fork and the E line or BW Fractal Line is the tine.
Lets look at a chart to see this:
This is the current EURUSD 10 pip Renko chart, forming a Fork as I write this. The Trend line has been broken, the E line has also been broken. The two of them form a fork which I call the BW fork. (B for my last initial and W for William. A little vanity there.)
The BW Fork is a powerful visual indicator. If price goes back above the tine (trend line) of the fork then the reversal becomes suspect. Price most often breaks below the E line or BW Fractal Line (They are the same in this example, but can be different as we know.) Then price most often moves back up into the BW Fork area. Once it is back in the fork it often forms a fractal and that is the fractal that Elliott calls wave two. (Note it may not form a fractal all of the time, but looking at a LBF or a LTF chart will reveal that there is always one there.)
So how to trade it?
The safest method is to open a trade as it crosses the E line again. That puts us in a third wave and Fibonacci comes into play.
Let us see how this one works out.
The BF Fork is a combination of the E line or the first fractal level past the red Teeth Line and a trend line. You may recall that the E line and the BW Fractal line may often occur on the same fractal. Either way we extend a horizontal line from the E Line Fractal or the BW Fractal to the right. We know that when the price breaks either of those levels, or both, that a trend reversal has occurred.
The HH HL LL LH count confirms this with the E line and the BW Fractal line can give an early warning or be used by itself.
Now if we look at the last two significant fractals and use the Tom De Mark method of drawing a trend line, using those two fractals, we find the trend line is the handle of a fork and the E line or BW Fractal Line is the tine.
Lets look at a chart to see this:
This is the current EURUSD 10 pip Renko chart, forming a Fork as I write this. The Trend line has been broken, the E line has also been broken. The two of them form a fork which I call the BW fork. (B for my last initial and W for William. A little vanity there.)
The BW Fork is a powerful visual indicator. If price goes back above the tine (trend line) of the fork then the reversal becomes suspect. Price most often breaks below the E line or BW Fractal Line (They are the same in this example, but can be different as we know.) Then price most often moves back up into the BW Fork area. Once it is back in the fork it often forms a fractal and that is the fractal that Elliott calls wave two. (Note it may not form a fractal all of the time, but looking at a LBF or a LTF chart will reveal that there is always one there.)
So how to trade it?
The safest method is to open a trade as it crosses the E line again. That puts us in a third wave and Fibonacci comes into play.
Let us see how this one works out.
Here is another example that where I am presently trading a figure four.
The game begins with a trend reversal and a Fork displayed in white lines. Note how the E line (in yellow) was later to the party than the Fork.
I missed a reversal trade there however, I then located a Four (shown in yellow lines) and traded it for 110.2 pips from the 50% entry level to
the Reward level.
A second four, shown by a diagonal black line joining the wick to wick of two opposing fractals was not traded because I was already in a trade.
It was also a good potential trade, in case you had missed the first one.
Then I took another four, this time with white lines and I am presently near the reward level on that one. In fact. I just checked and it closed for another 111.5 pips, so I updated the chart to show it. Not often I post just as a trade is concluding like this. Nice when it happens.
Did I use any indicators? I did look at the divergence on the AO and the Teeth line for the BW fractal.
Study this chart. It is good example of a BW Fork, an E line trend reversal and three figure four trades. Best of all it is an example of theory and practice
working together perfectly.
having said that, there was a trade that I missed. I missed it because I arrived late but we will get to that type of trade in a bit. Check the purple Fibonacci
line with its dotted white Fibonacci levels and see if you can spot it. After the new HH we get a LH at the 61.8% level. A trade taken there would currently
be up 269 pips. It can be done. Has been done many times.
Now that we have dealt with HH HL LL LH, E lines, BW Forks and Figure Fours, we are ready for Fibonacci. Stay tuned.
The game begins with a trend reversal and a Fork displayed in white lines. Note how the E line (in yellow) was later to the party than the Fork.
I missed a reversal trade there however, I then located a Four (shown in yellow lines) and traded it for 110.2 pips from the 50% entry level to
the Reward level.
A second four, shown by a diagonal black line joining the wick to wick of two opposing fractals was not traded because I was already in a trade.
It was also a good potential trade, in case you had missed the first one.
Then I took another four, this time with white lines and I am presently near the reward level on that one. In fact. I just checked and it closed for another 111.5 pips, so I updated the chart to show it. Not often I post just as a trade is concluding like this. Nice when it happens.
Did I use any indicators? I did look at the divergence on the AO and the Teeth line for the BW fractal.
Study this chart. It is good example of a BW Fork, an E line trend reversal and three figure four trades. Best of all it is an example of theory and practice
working together perfectly.
having said that, there was a trade that I missed. I missed it because I arrived late but we will get to that type of trade in a bit. Check the purple Fibonacci
line with its dotted white Fibonacci levels and see if you can spot it. After the new HH we get a LH at the 61.8% level. A trade taken there would currently
be up 269 pips. It can be done. Has been done many times.
Now that we have dealt with HH HL LL LH, E lines, BW Forks and Figure Fours, we are ready for Fibonacci. Stay tuned.
- #352
- Edited 1:40pm Jul 29, 2015 10:28am | Edited 1:40pm
I might as well just carry on with the Fibonacci material as this is such a good example.
I cleaned up the chart to illustrate the concept more clearly. When you get a trend reversal, there is an opportunity to draw a Fib
on the first HH and see at what Fib level the first LH will form. This one was at the 61.8% pullback level. The sweet spot is around
61.8% with a fractal, although a fractal may not always form on the pullback. This time one did.
The pullback gives us a wick to wick line for a Figure Four trade. I placed the first black line there to illustrate it.
The Fibonacci is drawn in purple. With a 61.8% pullback, it gives us an entry at the 61.8% level and a target at the 161.8% level. You
can see how that worked out. A Fibonacci constructed in this manner is very powerful. Even though I missed it I was confident with the
figure four trades that followed because the reward level for each was inside of the 161.8 Fibonacci target.
So there you have it - Fibonacci Reversal Trades and Figure Four Trades. Priceless.
I cleaned up the chart to illustrate the concept more clearly. When you get a trend reversal, there is an opportunity to draw a Fib
on the first HH and see at what Fib level the first LH will form. This one was at the 61.8% pullback level. The sweet spot is around
61.8% with a fractal, although a fractal may not always form on the pullback. This time one did.
The pullback gives us a wick to wick line for a Figure Four trade. I placed the first black line there to illustrate it.
The Fibonacci is drawn in purple. With a 61.8% pullback, it gives us an entry at the 61.8% level and a target at the 161.8% level. You
can see how that worked out. A Fibonacci constructed in this manner is very powerful. Even though I missed it I was confident with the
figure four trades that followed because the reward level for each was inside of the 161.8 Fibonacci target.
So there you have it - Fibonacci Reversal Trades and Figure Four Trades. Priceless.
So how about the EURUSD trade started yesterday?
I took a 0.1 lot trade on each of the Fibonacci levels. The trick now is to know when to exit.
The Alligator is wide open, so I am looking at the 100% target though the 61.8% target is just about there.
I will have to decide in a few hours, as I am away tomorrow and will not be able to monitor the trade further.
I took a 0.1 lot trade on each of the Fibonacci levels. The trick now is to know when to exit.
The Alligator is wide open, so I am looking at the 100% target though the 61.8% target is just about there.
I will have to decide in a few hours, as I am away tomorrow and will not be able to monitor the trade further.
EURUSD Trade Closed.
Good enough. I have to head out of town in a couple of hours and won't be back until Monday night.
The blue channel seems to be holding for now so I won't stay in.
This move was corrective in nature with all the overlapping waves. Hoping to get to a 100% level is too risky for me at this point.
The AO has three green bars and AC has a buy signal. Maybe it will challenge the upper, red trend line and break out higher next.
Locate the potential E line, keep an eye on the BW fractal in relation to the Teeth Line and see what Fibonacci tells us, when a
trend reversal and a BW Fork comes along.
Take the cash and let the credit go. 72. 54. 34. and 27 pips banked.
Good enough. I have to head out of town in a couple of hours and won't be back until Monday night.
The blue channel seems to be holding for now so I won't stay in.
This move was corrective in nature with all the overlapping waves. Hoping to get to a 100% level is too risky for me at this point.
The AO has three green bars and AC has a buy signal. Maybe it will challenge the upper, red trend line and break out higher next.
Locate the potential E line, keep an eye on the BW fractal in relation to the Teeth Line and see what Fibonacci tells us, when a
trend reversal and a BW Fork comes along.
Take the cash and let the credit go. 72. 54. 34. and 27 pips banked.
