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Educational Series: Trading with Boxes (Part 2)Remember from Part 1, that boxes - identify momentum - is trend-following - is reactionary, and does not predict or anticipate a move. In addition to using boxes to identify support/resistance levels, we can use boxes to identify breakout levels. Breakout levels are identified when the price breaks from a previous day's low/high. If the price breaks from the low/high of multiple days, then you can expect a more significant move in that direction. In Example 1: - Price rejects the resistance level (formed by the confluence of 2 previous day's high) - Breaking below the previous day's low - Selling opportunity, SL beyond the box high, TP at the lower support level formed by the confluence of 2 box lows. In Example 2: - Price rejects resistance level (formed by the confluence of 4 previous days' high) - Breaking below the previous day's low - Selling opportunity, SL beyond the resistance level, TP at the lower support level, formed by the confluence of 2 box lows. Note: In this case, the Risk:Reward ratio is lower than 1. When using boxes, because it is reacting to price, it can have a tendency to be slightly lagging. It is always a good practice to combine at least 2 different types of indicators in your analysis.
Education
by JinDao_Tai
US10Y Elliot Wave Analysis (fun might be over) **WHERE DO WE START** At this point it is nearly unarguable that the move up form the Covid lows looks impulsive, meaning we are in some sort of a new bull cycle. In the past, since US10Y's inception back in the late 1970s the path it followed had a downwards trajectory that made new lows after each bull cycle was done. The US10Y would then correct those lows over the next 2-4 years or so and retrace to .5 fib or .618 fib of the previous high. It did this every single time, however in 2022 it is acting very different. For the first time in history since inception the US10Y blasted through the .618 fibonacci retracement of the previous top which was in November of 2018. My view was bearish for most of this year since we were coming up against strong resistances, however since the price pierced through them all with little effort and continued up makes me lean bullish on the Macro outlook. **TRUNCATION** Truncation (definition) - What is truncation in trading. In most impulses, the fifth of the Elliott waves extends beyond the extremum of the third wave, but sometimes the fifth wave may not reach the end of the third wave . This phenomenon is called truncation or truncated wave. The next event I need to go into is the truncation of the 5th wave down that took place in August of 2020. Truncations are rare events in Elliot Wave Theory and require very careful analysis to ensure the count is not something different. It is more likely to see a truncation in very volatile environments, and Covid crash of 2020 was undoubtably one. This truncation does not show up on US05Y or US02Y leading me to believe the actual bottom on US10Y was in August of 2020 and NOT in March of 2020. However this doesn't change the current count, just some clarification for those using Elliot Waves. **WHERE ARE WE NOW** Since the bottom we see an impulse up of which waves (1) and (2) are complete and wave (3) is in progress currently finishing it's 5th subwave. I expect the price to come to 4% or even 4.5% before the likelihood of a pullback for wave (4) becomes highly likely. The wave (4) retracement should be relatively large pulling back to .236 or .382 on the fibonacci levels from the top of wave (3). The price could come down to 2.75% - 3.5% on US10Y depending on how high wave (3) ends up going, although wave (4) pullback is allowed to go as low as .5 fib which could bring the US10Y down even below 2.75%, but I must say I find that unlikely considering how bullish this move up is coming to be. **LIKELY PRICE PATH** What's beginning to look clear is that after we finish wave (4) in a 3 wave structure down or perhaps a triangle formation (common in wave 4 pullbacks), we are still going to need to complete the impulse sequence and start a wave (5) up. Yes, I expect US10Y to hit and possibly go past 5%. Once there we have a completed wave 1 on a Macro outlook since the crash of 2020. I will then expect government treasury bond yields to enter a short term "bear market" and correct the entire move shown in the chart as red ABC down. This could then be last great pullback... and an opportunity to buy a house at a very affordable rate. Why? Because once this ABC that will correct this entire bull move up is done, we should see continuation in rising interest rates in a new bull cycle up. A 5 wave Elliot impulse is not a complete sequence, it should be followed by a 3, 7, or 11 wave down correction. Typically retracing to .5 or .618 on fibonnaci retracement levels and continue up again in a minimum of 5 waves. **CONCLUSION** The era of cheap rates might be coming to an end, and 2020 covid crash might have marked a long term bottom on treasury yields. Cheers,
TVC:US10YLong
by Elliot618
TESLA - Time to recharge batteries? Looking at Tesla from an Elliot Wave perspective shows a very bullish uptrend since inception of the stock itself. Corrections & Bear Markets are there to beat you down and make you want to give up, and once in a while we are do for a big one. Looking at the chart I see a completion of Macro wave III which started in June of 2019. This was a huge move for Tesla gaining approx. 3,350%. Yes you heard that right, so when we see a large pull back, we shouldn't question it. The current correction can have many complex variations in Elliot Wave Theory, so far I see an ABC down complete, a correction up for wave (X), and now working on (Y) which should be in 3 waves as another ABC that could bring the price down to $138 as a 1:1 extension of wave A from top of wave (X). If it decides to go even deeper, suppose we have a drastic recession in the world markets including U.S., then the price is allowed to go as low as $28 or a 1.618 fibonacci retracement from wave B of (Y). In a slightly more bullish view, suppose the elections get markets to have a bear market rally and prices start going up, then we have a possibility that we are still not done with wave B of (Y) show in red colored ABC. However, I see this rally too is likely to fail if it happens; in the end gravity will win brining Tesla down somewhere in the support box (area outlined). Here, a longterm probable bottom as well as a reversal to the upside is likely. Cheers,
NASDAQ:TSLAShort
by Elliot618
EUR/NZD UNIQUE IDEA ..(Sell)hi to all friends Hope you all are enjoying me ideas and analysis. Now i am here to discuss about OANDA:EURNZD OANDA:EURNZD Located in a descending channel ( DOUBLE TOP )....more downside.... NOTE:: Most likely, it will fall to the 61% Fibonacci support level Trade Idea: - Watch for bearish price action at the 38-50 fibonacci level and take OANDA:EURNZD down. - Stoploss above the rejected price - For take profit, once price moves down, use a descending trendline to manage your trade and exit when price breaks that. After that it will follow again downtrend. Keep in touch we will update further soon. Goodluck and as always, trade safe!
Short
by Reza-Mahan
Doge inside wave p what should i do nowHi friends ! Dogecoin consolidationg in the narrow range . This means that the price is compressed , but it is on the decompression you can make the most money . We have to not miss this decompression . In this idea , I will tell you how to catch a powerful movement and make money on the rise . Now the price of DOGE below the 2 HUGE value areas which are resistance for the price . The big players continue to collect the liquidity close to the local lows and it's good for upcoming movements ! Preconditions to open long : ➕false breakout of the wedge ➕volume growth which confirms the pressence of buyer ➕DOM and Footrpint scalping tools help you to find the bottom and reversal point for the DOGE . Huge orders on the DOM usually help me to set short sl and get the best RR ( risk to reward ) ➕bullish BTC force the altcoins to grow and reach all targets The most important value area is $ 0.06-0.065 . The bottom of this area become the resistance for the price and if the bulls have no power to break it , the price continue to fall . ❗ If you open a long at the false breakout of the wedge , i recommend you to pay attention to this area . Maybe , it's worth to book 50 % of profit . ❗Friends , press the " boost " button , write comments and share with your friends - it will be the best THANK YOU . ❗ Personally , I open an entry if the price shows it according to my strategy . Always do your analysis before making a trade .
by dr_heidary