Looking for my next Forex trade
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Yes, the wave count on the AU daily says the top is in. And the 4 hour says we're working on the 5th wave beginning in the daily 3rd wave down.
So after the daily 3rd wave down completes, we still have to sit through a daily Wave 4 reversal back up to get ready for the final 4 hour 5th wave which will coincide with the daily 5th wave...and it will be ferocious.
From a technical standpoint, not only do we really need to wait on the 5th wave to begin on the daily, but really the 5th wave of the 5th wave to set up and begin...that's where the greatest volume appears in the whole run.
Here's the AU 4 hour chart with the current counts...just remember that the entire progression all the way through the 5th wave is going to take days of time yet.
The larger time frames are always in control Qui. And the smaller time frames can indeed be burdensome.
There is no holy grail. All we can do is stack the odds in our favor as much as possible and the TDI wave count is just another method to do that.
Remember...do the best analysis you can and then what happens is what happens. If we lose because of a logical analysis that didn't work out, then so be it.
There's no such thing as a 100% winner from a trading perspective but we can beat the odds compared to most retail traders.
But if we let emotion creep in and we start to doubt what we're doing, we're already beaten. This is what most traders have trouble with...taking the trade and just walking away and let the charts play themselves out. And if things don't work out the way they want for immediate graduation, they start doubting the system and get listless again looking for yet another trading system.
Patience is key...it's undoubtedly one of the single most important parts of trading.
Absolutely right Heavy. The more wave completions we have, the better we can determine that Wave 4 termination so we can enter at the beginning of Wave 5.
And I'm just as guilty of jumping the gun, getting in early...LOL!
Patience Qui. We're dealing with 4 hour and daily charts...remember, there are a ton of minor waves that have to play out before the larger ones can move...hundreds if not thousands. The small guys have to get their day in the sun before the big boys come out to play.
One thing most people don't realize in Forex is that these pairs only trend about 35% of the time. The rest of the time is spent consolidating.
But when they do start moving, it's well worth the wait.
That's what I'm counting on stargate. AU got pinned today in a shallow ADR movement while they moved the other pairs. It's primed for more downside and the news coming should be the catalyst to get it moving.
Let it go, Qui. Regretting the trade you missed is far better than regretting a bad trade because the wave count wasn't exactly clear.
Hey Qui. 5th wave is what I really mean. Termination of the 4th wave and the beginning of the 5th wave is what we're after in our trades.
I really believe the next 4 hour candle movement, which closes in 3 hours, is going to mark a significant shift in overall market sentiment between AU and EU.
Tick tock...waiting patiently for the chaos to erupt...LOL!
Market is waiting on a trigger...not sure what...can't find any news items pending here of any importance.
I went ahead and added a second AU short here...it really is the best spot to pile on.
Might take some off the table at the FE 61.8 at 0.7075 but the FE 100 should get nailed since we're still in the larger 3rd wave down. This would be the 5th minor wave of the large 3rd wave.
15 minute is moving up to retest the broken TDI trendline from what I can see. I figured on that but I didn't want to wait on it since it was so close.
Looks good here Heavy even though the retrace was small. There's still lots of room on the 4 hour TDI for a drop and the minor bounce burned off a lot of the oversold conditions on the 15 minute and hourly charts.
I think this is finally going to be the point where AU and EU diverge and go opposite directions, giving EA the boost I'm looking for.
AU 15 Minute Chart
And here's the small time frame chart I was watching to confirm my AU short entry. TDI sentiment shift back to bearish along with a price action action breakdown in progress. Might still be a bit early on the entry but with all of the time frames up to the 4 hour showing that Wave 4 retrace is complete, the drawdown should be small.
Shorting AU at 0.7135. TP set for 0.7025.
Looks like EU still had a minor 1-2 retrace movement to get out of the way on the hourly chart. EU 4 hour shows a turn back up on the TDI though after the trendline breakout.
Takes time to get going...
Thanks Kirby. Just trying to shed a little light into the dark corners of the Forex closet...LOL!
Not really Qui. One problem with the yen crosses in general is that they're too choppy. That's why I don't trade them very often.
I'm just gonna let it slide. There are plenty of other pairs with clean wave counts that are much easier to read.
Nah, I decided not to take the GJ trade after all. I've got enough on my plate with EU and EA right now. I'll let this one pass.
I'm setting a limit order to enter short on GJ at 157.95. Might wind up being a bit early on the short but today's open formed a gap just above 158 so I'm hoping the gap will fill before it tanks.
That's correct Jav. Wave 2 is very deep, especially after Wave 1 in the other direction. Wave 2 should retrace very nearly to the peak of where Wave 1 down began.
And the daily says we're setting up for a Wave 4 back up in the daily channel at the same time. So I expect a nice pop on EA before much longer.
GJ Hourly Chart Update
Sentiment has shifted in the market here. Since I already had a minor 5 wave count down and then a slight move back up, I have to assume at this point that this is a minor 3rd Wave down. So now I need a minor 4th wave back up to test that TDI trendline to enter short. Hopefully, I can get in around 158 on the short entry and ride the sucker down to at least the previous lows.
I probably have the wave count incorrect there Jav...I caught that earlier today as well. I was doing so many charts at once I made some mistakes moving too quickly.
The EA 4 hour chart and daily charts are really the only ones that matter now. Here's the 4 hour chart to go along with the EA daily chart.
Actually, there's nothing wrong with just taking shorts Jav if it's more comfortable and easier to see the wave counts.
There's always a pair falling somewhere...LOL!
That's not unusual Jav. Some people see short entries better than they do long entries on a chart, so they typically only like to take short trades.
It has to do with the way our brain processes patterns.
Here's another way to confirm that earlier EA hourly chart, Jav.
Waves 2 and 4 form tops. Waves 1 and 3 break sentiment and show a potential shift in the market.
Wave 3 has the high volume candles. So one really good signal to watch for during a trend run is to note when the LARGEST pullback occurs. That larger pullback in the case of EA told us that it was likely that one more high was coming and that would be it.
So on the TDI, Wave 3 is the one that broke market sentiment AND it was accompanied by the largest pullback in the series AND the high volume candles showed up at the same time.
So it had to be Wave 3.
EA hourly again...
Yes you can, but normally you can just eyeball it. If the TDI hasn't pulled back almost completely to the previous Wave 1 TDI peak, it's not finished.
Here's yet another example of how tops form at Waves 2 and 4, Jav.
When EA made that final new high, it happened on a Wave 2 peak on the daily. And, to really seal the deal, it happened on a Wave 4 peak on the EA hourly chart at the same time. So the top down approach to wave counting confirmed the top in two different ways.
EA daily first and then the EA hourly...
TDI Wave 2 movements are usually very deep Jav. They almost always retrace back to right near the peak of Wave 1...at least a 78.6 fib retrace of the Wave 1 TDI movement and most often 88.6 or even close to 100%. So the Wave 2 isn't really deep enough yet to call it a finished Wave 2. And the daily chart on NJ supports that idea as well.
Yep...when in doubt, just go back to the rule list. It really helps.
Even though I start with the daily, I try to always go to the weekly or even the monthly just to make sure I'm on the right track. The initial count is the most critical. The good news is, the daily count is normally the easiest to see.
Just go through the list of rules you have to make sure it fits every rule without question.
In a large down trend pair like NJ, start with the last most recent high. You know it has to be either Wave 2 or 4 so it's a good place to start the count.
Just posted the NJ weekly chart as well showing why the daily has to be numbered that way.
Making sure the count is right on the larger time frames is critical before you start using the top down method. One way to do that is after you label the daily, jump up to the weekly chart and see if it still makes sense.
And here's my NJ weekly chart Jav that shows why the daily must be closing in on a final 5th wave down.
The weekly shows that it's already completed 5 waves down and a Wave 1 back up in a new series. But, the Wave 2 retrace that we normally expect to see to form a final low hasn't finished yet...so NJ is very likely going to see new daily lows before it can stand a chance of bouncing.
So the daily chart that shows the final 5th wave about half complete goes along with this weekly chart that shows the Wave 2 retrace about half complete. Since they both go together, we can assume that our daily wave count is correct.
Here's the correct count Jav that fits all the rules so far on the NJ daily chart.
The most recent highest high we have has to be either Wave 2 or Wave so we start there. And if that highest high on price was Wave 2, then Wave 1 had to come before that.
Also, look at where I have Wave 3 marked. It broke the previous TDI support level trendline. A shift in sentiment has to be either Wave 1 or Wave 3 but that low point where you have Wave 1 marked can't be Wave 1 because we've already identified Waves 1 and 2 prior....so it has to be Wave 3.
The rest of the count takes care of itself after that.
NJ Daily Chart...
That's what matters, Qui. If you keep at it long enough, soon this stuff will just jump out at you. You'll wonder how you ever missed it.
GJ Hourly Chart
This one is on my radar for a short soon, Qui. We've completed 5 waves up in an initial Wave 1 move and it's completed an initial minor 5 waves down. It's working on a minor 5 back up now. But at some point it's going to set up for that larger 2 in yellow back down again, and likely to make new daily lows when it does.