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 Author Topic: CryptoWaves - Elliott Wave Analysis Blog  (Read 29075 times)
CryptoWaves
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 April 23, 2014, 12:05:21 PM

As far as I understand, the "triangle" presented by Cryptowaves is not really a triangle as it must subdivide into at least five waves where each of them is a zigzag.

Triangles are counted as 3-3-3-3-3  for a, b, c, d, e. Expect two more touches of the lower trendline for c and e. If there's only one touch of the lower trendline then it could still be a flat for iv.
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Queeq
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 April 23, 2014, 01:14:36 PM

As far as I understand, the "triangle" presented by Cryptowaves is not really a triangle as it must subdivide into at least five waves where each of them is a zigzag.

Triangles are counted as 3-3-3-3-3  for a, b, c, d, e. Expect two more touches of the lower trendline for c and e. If there's only one touch of the lower trendline then it could still be a flat for iv.

Yes, that's what I meant. But I don't see this pattern there:

But if it's really a triangle then I think it would most likely be wave B, and previous rise - wave A. It's too long to be single wave 4.

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CryptoWaves
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 April 23, 2014, 01:58:43 PM

There are no strict rules on the time aspect of waves, only guidelines.
Queeq
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 April 23, 2014, 02:04:19 PM

There are no strict rules on the time aspect of waves, only guidelines.

Sure, but it is very uncommon for wave 4 to be as long as waves 1-3 together. Motive waves are usually extended and could be very long. This one is corrective. That's why I think it's more likely to be wave B.

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CryptoWaves
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 April 23, 2014, 03:05:56 PM

There are no strict rules on the time aspect of waves, only guidelines.

Sure, but it is very uncommon for wave 4 to be as long as waves 1-3 together. Motive waves are usually extended and could be very long. This one is corrective. That's why I think it's more likely to be wave B.

That's the definition of a wave 4,actually.

Wave 4: Wave four is typically clearly corrective. Prices may meander sideways for an extended period, and wave four typically retraces less than 38.2% of wave three (see Fibonacci relationships below). Volume is well below than that of wave three. This is a good place to buy a pull back if you understand the potential ahead for wave 5. Still, fourth waves are often frustrating because of their lack of progress in the larger trend.

I'm not changing my view until price justifies a change.
Queeq
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 April 23, 2014, 03:27:34 PM

There are no strict rules on the time aspect of waves, only guidelines.

Sure, but it is very uncommon for wave 4 to be as long as waves 1-3 together. Motive waves are usually extended and could be very long. This one is corrective. That's why I think it's more likely to be wave B.

That's the definition of a wave 4,actually.

Wave 4: Wave four is typically clearly corrective. Prices may meander sideways for an extended period, and wave four typically retraces less than 38.2% of wave three (see Fibonacci relationships below). Volume is well below than that of wave three. This is a good place to buy a pull back if you understand the potential ahead for wave 5. Still, fourth waves are often frustrating because of their lack of progress in the larger trend.

I'm not changing my view until price justifies a change.

Actually we won't see much difference if the following would be wave 5 or C. Both of them could be pretty similar if we have powerful 5th or weak C wave. It would become clear when the following major wave unfolds. Anyway, let's watch.

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RyNinDaCleM
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 April 23, 2014, 06:56:44 PM

After a \$150 rise for 3 in little more than two days, it is to be expected to see a longer sideways movement. Sometimes, when the market is indecisive, you get more of a time correction rather than so much of a price correction.

This is just a little explanation of the psychology behind impulsive waves and why the fibo levels that have such predictive powers work as they do;
Wave 1 is believed to be "just a pullback" to the main trend. So people think "this is my chance to get out before the trend continues". This is what makes wave-2 sharp and deep. When the selling fails to make new lows, people start buying. When new highs are made, the trend starts to establish itself. People who don't want to be left out combined with traders watching the indicators starting to turn buy more and the wave-3 is now in full effect. This is what makes the 3rd the most powerful wave. After such a rise, the market needs a cool-off. Enter wave-4... A meandering sideways range to allow bids to catch up to the spot. You have bears who think it's the top of a C and bulls who think it's going to the moon. This is the indecision that makes a 4 very unpredictable. This same indecision builds strong S/R levels for the correction after the wave-5. Finally wave-5 breaks free and many who exited, get back in, in a stop-loss fashion. Again, no one wants to miss the train! This is especially true in Bitcoin. It is this mentality that catches people holding through the downtrend. Those that sell and panic buy back in for the 5th wave are some of the biggest culprits.

This psychology works in both directions, not just up.

chessnut
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 April 23, 2014, 11:01:38 PM

chessnut
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 April 24, 2014, 12:16:25 AM

RyNinDaCleM, can you please comment on the descending wedge illustrated above? Im not 100% on the rules/guidelines with that.

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Legen -wait for it- dary

 April 24, 2014, 05:07:52 AM

RyNinDaCleM, can you please comment on the descending wedge illustrated above? Im not 100% on the rules/guidelines with that.

That is something I was watching very closely today. It did however, fail to touch the lower trend line to complete the wedge. It then preceded to break up above the upper trend line. The lack of conviction has me wary of a true break out, though. In Bitcoin terms, it might still be considered a wedge since the low liquidity of this market allows for strange moves that make no sense from an EW standpoint until much later.

Rules for an ending diagonal:
Has 5 waves and ALL are 3's
4 almost always overlaps 1
3 is still never the shortest
the trend lines converge and both either ascend or descend together

I redrew the upper line and it is still intact with one more wave down to complete. This would explain the lack of push on the break-out.

Edit:
Fixed

chessnut
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 April 24, 2014, 05:21:18 AM

Thanks  nice chart.

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Legen -wait for it- dary

 April 24, 2014, 10:56:48 AM

I updated that last chart with a channel if it turns into a double zig-zag. Divergence in the EWO says this move is almost over if not already.

chessnut
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 April 24, 2014, 11:20:16 AM

Thanks RyNinDaCleM, very interesting chart. the price action is interesting at these levels. weak to both sides, but showing support. I dont see this doing anything much without a drive, hopefully we will get some news in the NY session to catalyse the situation.

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Legen -wait for it- dary

 April 24, 2014, 11:43:11 AM

Thanks RyNinDaCleM, very interesting chart. the price action is interesting at these levels. weak to both sides, but showing support. I dont see this doing anything much without a drive, hopefully we will get some news in the NY session to catalyse the situation.

Yeah, it'll be more of a spike triggering some panic (This can go both ways!). If up, expect a nice scalp. If down, it does a few things. It neutralizes the divergence and possibly invalidates this count which can cause a bearish outcome. I have bearish counts that are still in play, currently, and I don't discount the idea of a break down. The underliers are not great at the moment.

chessnut
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 April 24, 2014, 11:48:24 AM

Here is another possible count. the B wave wedge calls for a terminal C wave, and the A - C wave demonstrate divergance.

Bears are getting cocky at the moment I think they might get a surprise  will see.

chessnut
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 April 24, 2014, 11:38:21 PM

two possible counts I see, one bullish, one bearish (but not very bearish)

the fashion with which we break/not break 530-550 will be much revealing.

RyNinDaCleM
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Legen -wait for it- dary

 April 25, 2014, 12:13:31 AM

two possible counts I see, one bullish, one bearish (but not very bearish)

That bearish count is actually quite bearish in the longer mid-term but the final C will be a nice long, possibly reaching \$600+.
A flat is also possible therefore only reaching ~\$550 but still nearing \$100 move is a nice trade at 20%

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Legen -wait for it- dary

 April 25, 2014, 12:22:04 AM

This is another bear count building off of CW's triangle with the C extending to 612 (61.8% of A)-692 (100% of A)

RyNinDaCleM
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Legen -wait for it- dary

 April 25, 2014, 03:45:58 AM

Triangle is invalidated

chessnut
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 April 25, 2014, 03:56:14 AM

I think this news validates an impulsive wave down. C wave.

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