Plan the Trade

A HH on the 1hr chart above negates the count and also changes it to look more like a 5w move long.

It is irrelevant to the system trades, however, if i have a strong count, i find that taking a set-up on a tick scale within the powerful 3rd wave, can get you into a trade that you can simply let run...

Doesn't seem much point continuing to post set-ups, but just in case anyone is using this system to bag points consistently, i thought i would post a blank chart and see if anyone can highlight the one 'nailed on' trade within;

Hello CB

You mean this?

Haha, i will give you that one, despite the fact that it was effectively coming from a LH, there is also a flagline which a formed a larger 123, which was from the last HH (blue line)

The trade i actually meant was the simple H&S beforehand, all done and dusted in a mere few minutes;

Going back to Monday's chart of the 1hr Dow;



I then mentioned the slight HH changed the look of it the following morning.

This is the reason that i am not overly enamoured to EW. It has to make itself easy to read all of the time and quite simply, it doesn't.
It only takes one cycle to be obscure and it creates doubt. Doubt means losses... everytime.

If you leave anything to chance in the markets you will lose. Fact.

The fresh high was so minimal in the chart that i guess we had a running 2nd wave for the 'c' (of 'b' of 'C') and that my count is still valid.



It certainly been accurate thus far, but i guess i will really only get the brownie points if it finishes with one more short cycle! I do not think it is a complex move at the moment. The labeling stands as a simple abc (leading diagonal A/ending diagonal C)

Really upping the ante when we have volatility such as recently...

When there is lots of movement, i drop the size of the range bars down to a single point on the tick by tick chart. You have to be in and out, sometimes very quickly grabbing a handful of points at a time. Exits become a gut instinct. Remember a profit is a profit and provided you are not risking more than you gain per trade, we are combining both high probability with often multiple reward vs risk.

Here is the Dax chart;



At the time, the C&H long set-up to the LHS of the chart was in more detail, but obviously the chart has scrunched up after the subsequent drop.
The key is to leave anything risky, but also to take anything valid. That means it is down to experience and discretion.

Normal rules apply though. HH's/HL's dictate a trade and i want the 123 to make a shallow flag or C&H.

I also do not wait for a 123 if the pullback is slight within a strong trend. If the MA's are at a decent angle, you can merely take the trade on the fresh high/low, (long/short), without determining a 123, whereas with a steeper/larger pullback, i will look for a 123 as per normal.

You can see by the timescales just how quickly these set=ups are occurring, sometimes several in a half hour.

Some beautiful trending going on lately!

I thought i would wait before posting the alternative diagonal ending (expanding) for the Dow.
Even if this current long cycle was an 'X' wave, it would have a similar look and result;



I have lost a load of charts from an earlier computer malfunction, but this was one of the scenarios i posted last week.

Again, this is EW work and i do not stick to it, but merely use it as a possible guide. If/when we start to make LL/LH's and it gains momentum, it can give an idea of when to expect a nice trend to establish.

Yes, it's sometimes possible to get a trade away and run it according to EW work, but it does not happen often enough for my liking, hence sticking to the short timescale C&H/Flags...

and the caveat is that i really don't care if the longer term chart works out or not! There has, again today, been many many set-ups, 6 winners and only one loser (irregular 'B')...

17,760 area would have it looking more like correction is over. We also have a flagline from top, on larger timescales to note;

Discipline is perhaps the hardest part of trading to adhere too. Eventually though, it simply becomes a habit.

Here is the Dax chart from the past hour or so;




Using reverse C&H trades (as a 123). Entry is a break of point 2, stop above point 3, but you are entering with trend after subwaves 1&2, (thus usually into powerful wave 3), so no waiting.

The important thing is that points 2&3 are made in single cycles. By using the tick by tick chart with small range bars, i can see when this happens very clearly.
We have a clear defined 'V' for our 123. Exit will usually be when the 20sma is hit (after the move gets into profit), or i use the 50sma if trend is not so strong/set up was on a larger scale.

As ever, great stuff. Thanks

USDCAD being a darling, standard procedure;

Cl;



Xau;

UsdCad again, but with Range Candles;



Looks to me like Oil & markets set for higher early next week, UsdCad a little out of synch, but as always, simply follow the clues and set-ups...

This is why i like using Range candles, they make it much easier to identify point 2 in a single cycle/channel. This is the most important factor. It will be a minor 5w move.

It does not matter about point 3. It can be a simple abc corrective move, or complex. Even better if complex and shallow, because it represents strength in the underlying direction, thus your set-up will likely trigger and run with no 'heat'



If i repost the Dax chart from 25th on tick by tick scale;



The 123's in the red circles illustrate the above perfectly. Point 2 made in one direct channel.

Lots of nice set ups this morning. Here's two of them.

Firstly the EurJpy, with a standard H&S pattern;



Firstly we have the last significant HL taken out to the left, in one channel (cycle), thus a fresh LL trend change for at least an ABC.
After the pullback we get a small 5w move short for a second LL, followed by a pullback. Wave C will always be in 5w, so is it already finished in a truncated move?

We do not know, but if it is, it will not make yet another fresh LL, thus this is our trigger, we know that another low will mean one of two things; either another likely 2 impulse cycle shorts to follow (3&5), or, as i have illustrated, an abcde ending diagonal.

I described this in a post above. If we get a significant pullback, immediately after trigger, there is a strong likelihood that this will be the outcome. Not always, as it might be a deep subwave (ii) of the 3rd, but this is rarer.... An ending diagonal usually has a 3-3-3-3-3 structure and as noted the first drop looks to be in 5w minor, thus it did not appear likely in this case to become a diagonal...

Imo, it is always worth taking this trade. Trading is all about probabilities and the most likely outcome in this instance was a nice blast short for a 3rd wave, giving an easy 20 pips.

I mentioned that i would post a couple.

An even easier trade for 15 pips on the Dow, (there was an identical set-up simultaneously on the Dax, so take your pick);



This is what i keep banging on about, determine immediate trend beforehand, wait for pullback. Use a 123 to enter with trend. The important part though is that point 2 is very near or equal to the last LL (before pullback). If slightly higher it will make a flagline, if slightly lower, it will make a C&H.

In the instance of a shallow flagline, i will wait for the couple of pips required for the fresh low before entry. That way, the only reason for a failure is an irregular B wave. We have narrowed down all other possibilities, thus another high probability trade and easy 15 pips. The Dax gave 20+

Hi CB

Could you give me some examples which shows the difference between shallow flagline and deep(?) flagline ?

and how irregular B makes it fail.

Thanks very much!

Here it is in theory;