Critical Levels - EW analysis

[h3speros]

There are only 3 hard rules, all else are guidelines, it is up to one who is counting, what guidelines one wants to follow.

Rule 1: Wave 2 cannot retrace more than 100% of Wave 1.

Rule 2: Wave 3 can never be the shortest of the three impulse waves.

Rule 3: Wave 4 can never overlap Wave 1.



http://stockcharts.com/school/doku.php?id=chart_school:market_analysis:elliott_wave_theory#three_rules

Corrections don't have any hard rules, just guidelines.

Here is a good site for guidelines:

http://www.tradingfives.com/articles/elliott-wave-guide.htm

[1713532776]

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[1713532776]

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[Tzupy]

I am skeptical about further down from here, red volume has been decreasing and there is a bullish double-bottom in 1h MACD.
While I can't exclude another drop, I find more probable to find a short term bottom, then go up to about 280$ and start the crash from there.

[Queeq]

Yeah, that's not a rule, but I can hardly remember any second waves retracing less than 50% so I'd expect this one to get at least a bit closer there.

[chessnut]

Yeah, that's not a rule, but I can hardly remember any second waves retracing less than 50% so I'd expect this one to get at least a bit closer there.

As of late, it has begun looking like a triangle wave B. imo. see what Im seeing? I think we will know in a day or two. The zig zag would have a fittingly shallow reaction.

[xybersurfer]

There are only 3 hard rules, all else are guidelines, it is up to one who is counting, what guidelines one wants to follow.

Rule 1: Wave 2 cannot retrace more than 100% of Wave 1.

Rule 2: Wave 3 can never be the shortest of the three impulse waves.

Rule 3: Wave 4 can never overlap Wave 1.



http://stockcharts.com/school/doku.php?id=chart_school:market_analysis:elliott_wave_theory#three_rules

Corrections don't have any hard rules, just guidelines.

Here is a good site for guidelines:

http://www.tradingfives.com/articles/elliott-wave-guide.htm

the page you linked to and this thread describes how to recognize Elliot Waves. but how do you use them to predict moves?
i'm probably missing something

[RyNinDaCleM]

There are only 3 hard rules, all else are guidelines, it is up to one who is counting, what guidelines one wants to follow.

Rule 1: Wave 2 cannot retrace more than 100% of Wave 1.

Rule 2: Wave 3 can never be the shortest of the three impulse waves.

Rule 3: Wave 4 can never overlap Wave 1.



http://stockcharts.com/school/doku.php?id=chart_school:market_analysis:elliott_wave_theory#three_rules

Corrections don't have any hard rules, just guidelines.

Here is a good site for guidelines:

http://www.tradingfives.com/articles/elliott-wave-guide.htm

the page you linked to and this thread describes how to recognize Elliot Waves. but how do you use them to predict moves?
i'm probably missing something

Yes, there is a lot more to it than just that link and a chart that has already played out. The relationships and ratios between impulses and correctives help to guide you in what can come next. Do a lot of reading and counting (and I mean, count EVERYTHING) when you think you got it, count again. Ask questions here. Post counts for evaluation. Practice. Practice and lots of it is the only way to really learn EW.

[lebing]

starting to push upper end of the channel. might break out today.

[chessnut]

The failure of wave C to unfold as a clear impulse (at the time being) gives us a strong clue that a triangle is unfolding here as triangles unfold in five wave of 3 and are corrective moves.

A triangle here changes the medium term count quite interestingly, as the decline towards 220 would become a terminal move, perhaps wave B of a larger flat, or something else, we shall see.

[SkyValeey]

https://www.tradingview.com/v/QreoBCMc/ Beautiful

[michaelGedi]

The failure of wave C to unfold as a clear impulse (at the time being) gives us a strong clue that a triangle is unfolding here as triangles unfold in five wave of 3 and are corrective moves.

A triangle here changes the medium term count quite interestingly, as the decline towards 220 would become a terminal move, perhaps wave B of a larger flat, or something else, we shall see.

do you see a scenario where we break out upwards for a short/med term period? how would that fit into a count if at all?

as per lebings chart, there is also a large descending triangle with similar contact points which traditional TA says "normally" breaks out up.

this idea would fit with the depleting volume on this recent med term downtrend move, but EW doesn't care about volume right?

[chessnut]

do you see a scenario where we break out upwards for a short/med term period? how would that fit into a count if at all?

as per lebings chart, there is also a large descending triangle with similar contact points which traditional TA says "normally" breaks out up.

this idea would fit with the depleting volume on this recent med term downtrend move, but EW doesn't care about volume right?

That's not a descending triangle, or what we would call an ending diagonal in EW. It is invalid for more than one reason, but as they tend to break out sharply and quickly I can assure you that by now the better explanation is still the original impulse count which is plausible and valid. Look at the chinese chats, its inconsistent with an ED.

We could still break up, but eyes on the prize, we are looking at the moment for this potential triangle to unfold in good form. Ive never used volume in EW but we recognise the character of volume in impulses.

[futureofbitcoin]

Hey chessnut, I have a few questions, if you don't mind answering. Thanks in advance.


1. How often, from your experience, does bitcoin's movements follow EW? I mean, that bitcoin's movements end up making sense in an EW perspective, and is not extremely surprising? I don't need a really accurate statistic, but just a general feel.

2. Taking a very very long term perspective, what are your thoughts on bitcoin (not bitcoin trading)? Do you think it will "go to the moon", or just end up being a good trading tool for a while and fade away?

[damiano]

Been lurking in this thread a while.  Chessnut your pretty amazing! 

[michaelGedi]

do you see a scenario where we break out upwards for a short/med term period? how would that fit into a count if at all?

as per lebings chart, there is also a large descending triangle with similar contact points which traditional TA says "normally" breaks out up.

this idea would fit with the depleting volume on this recent med term downtrend move, but EW doesn't care about volume right?

That's not a descending triangle, or what we would call an ending diagonal in EW. It is invalid for more than one reason, but as they tend to break out sharply and quickly I can assure you that by now the better explanation is still the original impulse count which is plausible and valid. Look at the chinese chats, its inconsistent with an ED.

We could still break up, but eyes on the prize, we are looking at the moment for this potential triangle to unfold in good form. Ive never used volume in EW but we recognise the character of volume in impulses.

yes, there is a large descending triangle that fits with the bottoms at around 236 from near the top at 300, I won't draw it as my chart skills need some work, but it's this shape:

http://www.investopedia.com/terms/d/descendingtriangle.asp

actually my memory was wrong anyways, and it is traditionally bearish it's the descending wedge that normally breaks out upwards... as with EW having multiple counts, we can see multiple lines on charts as well 

[chessnut]

Hey chessnut, I have a few questions, if you don't mind answering. Thanks in advance.


1. How often, from your experience, does bitcoin's movements follow EW? I mean, that bitcoin's movements end up making sense in an EW perspective, and is not extremely surprising? I don't need a really accurate statistic, but just a general feel.

2. Taking a very very long term perspective, what are your thoughts on bitcoin (not bitcoin trading)? Do you think it will "go to the moon", or just end up being a good trading tool for a while and fade away?

1.) Bitcoin moves frequently in terms of EW, especially after large volatile, long pent up swings. It does not always in terms of my EW  , and sometimes it is a bit batshit crazy, but not often at all imho. Dont disregard the value of adapting and retrospective analysis, the compiling of evidence is like playing russian roulette. Some say you can count everything, but I think nah, somethings are too ambiguos or just outside of the principle in character entirely and I think those times the signal is to walk away.
Watch this video.
https://www.youtube.com/watch?v=yVkdfJ9PkRQ
In many ways this is how the market is constantly changing in character, although it is always moving towards or from harmonic unison.

2.) I am fundamentally bullish on bitcoin, but I do not let that affect my counting (at least not any more). I am excited because I see that it may go 'to the moon' as it has before, but I also see that it may take a great deal of time longer than one might hope, and that we may still go a great deal lower than one might hope.

Been lurking in this thread a while.  Chessnut your pretty amazing!

I have enjoyed my finest month of trading ever, up about 1200% after managing to string about 5 trades together on 20x leverage (Im a heavy swinger). But just you wait, you'll see me make a good few bum calls inevitably

[RyNinDaCleM]

...Some say you can count everything, but I think nah, somethings are too ambiguos or just outside of the principle in character entirely and I think those times the signal is to walk away.

I disagree on this part. Sometimes it only becomes clear in retrospect, but it always fits as a piece of the larger puzzle. The ambiguity at times is tough to work with, but there is always possible and impossible counts available. That's why I periodically break down the larger (4hr or Daily) structures into every valid count I can produce. Then decide on the probabilities for each outcome using the higher resolution of lower time frames and indicators like MACD, RSI and my EWO. When you know all the possible counts, nothing comes as a surprise when it does finally come. If I had to comment on how well Bitcoin holds to EW, I would say some guide lines like the time spent in sideways consolidations tend to be longer than typical, or the depth of retraces sometimes don't get quite as deep as they should. I attribute much of both of those to market participants who lie in wait. Waiting for the next whale move before they react to it (often too late by that point). This may be the case in larger markets too, but the smaller size of Bitcoin sort of amplifies such habits.

[Xiaoxiao]

Hey chessnut, I have a few questions, if you don't mind answering. Thanks in advance.


1. How often, from your experience, does bitcoin's movements follow EW? I mean, that bitcoin's movements end up making sense in an EW perspective, and is not extremely surprising? I don't need a really accurate statistic, but just a general feel.

2. Taking a very very long term perspective, what are your thoughts on bitcoin (not bitcoin trading)? Do you think it will "go to the moon", or just end up being a good trading tool for a while and fade away?

1.) Bitcoin moves frequently in terms of EW, especially after large volatile, long pent up swings. It does not always in terms of my EW  , and sometimes it is a bit batshit crazy, but not often at all imho. Dont disregard the value of adapting and retrospective analysis, the compiling of evidence is like playing russian roulette. Some say you can count everything, but I think nah, somethings are too ambiguos or just outside of the principle in character entirely and I think those times the signal is to walk away.
Watch this video.
https://www.youtube.com/watch?v=yVkdfJ9PkRQ
In many ways this is how the market is constantly changing in character, although it is always moving towards or from harmonic unison.

2.) I am fundamentally bullish on bitcoin, but I do not let that affect my counting (at least not any more). I am excited because I see that it may go 'to the moon' as it has before, but I also see that it may take a great deal of time longer than one might hope, and that we may still go a great deal lower than one might hope.

Been lurking in this thread a while.  Chessnut your pretty amazing!

I have enjoyed my finest month of trading ever, up about 1200% after managing to string about 5 trades together on 20x leverage (Im a heavy swinger). But just you wait, you'll see me make a good few bum calls inevitably

Where did you get the 20x leverage?

[chessnut]

Where did you get the 20x leverage?

Okcoin

[futureofbitcoin]

Hey chessnut, I have a few questions, if you don't mind answering. Thanks in advance.


1. How often, from your experience, does bitcoin's movements follow EW? I mean, that bitcoin's movements end up making sense in an EW perspective, and is not extremely surprising? I don't need a really accurate statistic, but just a general feel.

2. Taking a very very long term perspective, what are your thoughts on bitcoin (not bitcoin trading)? Do you think it will "go to the moon", or just end up being a good trading tool for a while and fade away?

1.) Bitcoin moves frequently in terms of EW, especially after large volatile, long pent up swings. It does not always in terms of my EW  , and sometimes it is a bit batshit crazy, but not often at all imho. Dont disregard the value of adapting and retrospective analysis, the compiling of evidence is like playing russian roulette. Some say you can count everything, but I think nah, somethings are too ambiguos or just outside of the principle in character entirely and I think those times the signal is to walk away.
Watch this video.
https://www.youtube.com/watch?v=yVkdfJ9PkRQ
In many ways this is how the market is constantly changing in character, although it is always moving towards or from harmonic unison.

2.) I am fundamentally bullish on bitcoin, but I do not let that affect my counting (at least not any more). I am excited because I see that it may go 'to the moon' as it has before, but I also see that it may take a great deal of time longer than one might hope, and that we may still go a great deal lower than one might hope.

Been lurking in this thread a while.  Chessnut your pretty amazing!

I have enjoyed my finest month of trading ever, up about 1200% after managing to string about 5 trades together on 20x leverage (Im a heavy swinger). But just you wait, you'll see me make a good few bum calls inevitably

Thanks man. You answered exactly what I was looking for. I hate how some people always try to be extremely vague and avoid answering the question. You're awesome.

[chessnut]

There is one other possibility to explain why wave C started with an abc, that is with an ending diagonal, 5 waves of 3. As the triangle has been eliminated this is now the most probable count. As a flat ABC, 3-3-5, is not a terminal move as a triangle tends to be, we can count the impulse as I-II rather than A-B, suggesting that we could see new yearly lows follow a breakdown from this point. Ending diagonals characteristically break through the lower trend line sharply, watch out for this.