I've had many DM's about our indicators and methods after posting one of our last posts on Bitcoin, so wanted to post another with a simple breakdown of the analysis method.
We usually start off with a weekly or/and daily view of the Elliott structures.
Once we have a feel for the overall direction, I move into looking for key levels. This can be done at areas based on the Elliott structure, you will notice Fibonacci levels, areas of imbalance or larger order blocks. These are also recognized in various shapes and forms as supply/demand or/and support resistance. Each technique is a little different but the underlying concepts are the same, They are like magnets to price action.
For those, not familiar with Ralph Nelson Elliott's work - he was one of the great pioneers of the stock market. Developing the Elliott wave principle used to analyze financial market cycles and forecast market trends by identifying extremes in investor psychology, highs and lows in prices, and other collective factors.
In this particular pair AUD/USD at this point in time it looks like the overall condition of the trend is up
Looking at the Elliott and working on the theory of a 3-4 move down on the weekly timeframe - I notice the lower channel level is around 0.7450 level. This matches the Software we use called "advanced get" for spotting Elliott waves quickly. And it's key level of around 0.7450. Now an area of interest and the market looks like it needs a breather. So a short term down move makes a lot of sense.
To justify this stance further we have a stochastic false bar indicator showing overbought and oversold conditions - a standard stochastic will work here also. But if we observe the weekly timeframe, it's clear to see a move from above to below only now leaving the overbought area.
Zooming into the daily timeframe - we can see an area of consolidation, this area fits the expected level for a 3 extension wave completion in terms of Elliott wave theory and this is shown by the use of an average price based on the Re-Accumulation area. We mark the 50% level with an orange line and move to the next view.
The next part of the analysis looks at another indicator that combined an ATR to show the momentum of pips traded as the price moves towards the levels of interest for us.
This highlights a move to the downside as we are expecting, backed up by the wave up move levels coming back to the mean level.
The last piece of the analysis is done by combining another stock market pioneer's technique, known as the Wyckoff Schematic. Richard Wyckoff analyzed the market operators and their operations and determined where risk and reward were optimal for trading entries.
With all of the bias pointing towards a Bear move, we are now looking at several additional entries for a short. We entered the first short at 0.77510 level yesterday (26th of Jan) and will be looking for scale in at the levels of weakness as price leaves the range.
Please feel free to comment and like (much appreciated) and any questions - please just reach out. Hope this helps.
Disclaimer
This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
We usually start off with a weekly or/and daily view of the Elliott structures.
Once we have a feel for the overall direction, I move into looking for key levels. This can be done at areas based on the Elliott structure, you will notice Fibonacci levels, areas of imbalance or larger order blocks. These are also recognized in various shapes and forms as supply/demand or/and support resistance. Each technique is a little different but the underlying concepts are the same, They are like magnets to price action.
For those, not familiar with Ralph Nelson Elliott's work - he was one of the great pioneers of the stock market. Developing the Elliott wave principle used to analyze financial market cycles and forecast market trends by identifying extremes in investor psychology, highs and lows in prices, and other collective factors.
In this particular pair AUD/USD at this point in time it looks like the overall condition of the trend is up
Looking at the Elliott and working on the theory of a 3-4 move down on the weekly timeframe - I notice the lower channel level is around 0.7450 level. This matches the Software we use called "advanced get" for spotting Elliott waves quickly. And it's key level of around 0.7450. Now an area of interest and the market looks like it needs a breather. So a short term down move makes a lot of sense.
To justify this stance further we have a stochastic false bar indicator showing overbought and oversold conditions - a standard stochastic will work here also. But if we observe the weekly timeframe, it's clear to see a move from above to below only now leaving the overbought area.
Zooming into the daily timeframe - we can see an area of consolidation, this area fits the expected level for a 3 extension wave completion in terms of Elliott wave theory and this is shown by the use of an average price based on the Re-Accumulation area. We mark the 50% level with an orange line and move to the next view.
The next part of the analysis looks at another indicator that combined an ATR to show the momentum of pips traded as the price moves towards the levels of interest for us.
The last piece of the analysis is done by combining another stock market pioneer's technique, known as the Wyckoff Schematic. Richard Wyckoff analyzed the market operators and their operations and determined where risk and reward were optimal for trading entries.
With all of the bias pointing towards a Bear move, we are now looking at several additional entries for a short. We entered the first short at 0.77510 level yesterday (26th of Jan) and will be looking for scale in at the levels of weakness as price leaves the range.
Please feel free to comment and like (much appreciated) and any questions - please just reach out. Hope this helps.
Disclaimer
This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
코멘트:
Lovely little move and perfect respect of structure.
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And the next level.
코멘트:
As expected it's on its way back to collect the order blocks and Imbalance areas.
코멘트:
as per the image above. The price has now gone and tagged the lower Imbalance zone and rejected.
코멘트:
Yet another perfect level touch
코멘트:
Notice the level of the yellow line. 🎱
코멘트:
Back at the key level - breaking down, slowly but surely. Wait for another scale in on the retest of the lower SOW level.
코멘트:
in perspective to the post here's the original drawing updated.
코멘트:
Playing out and creating smaller distribution levels as it goes.
Discord Server for education and advanced techniques: discord.gg/5t3w47raHe
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Master the Art of Trading: amzn.to/3nUfB9r
Prop firm partners (FTMO)
shorturl.at/hBEQ4
