My Forex Prediction using Advanced GET - page 73
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NOTIFICATION: DIFFICULTY IN TRADING THE CORRECTIVE WAVES and WHY?
The series of articles that I have been writing on Trading the Elliott Waves will not be complete without touching on the subject of Corrective Waves.
This evening I shall be presenting a brief article on Difficulty in Trading the Corrective Waves and Why? and hopefully readers will understand why every time I see a Corrective pattern in GET, I stay aside.
Until Then
Kenneth
Hi Kenneth
I would like to thank for all of your great posts here. I learned a lot form them. I already got the Elwave 7.6 and GET but could not use them due to I do not know how to get the data from eSignal. So would you please give me some advice where can I get the data and put in the software. Thanks in advance.
MichaelHi, Michael:
Happy to hear you manage to have GET and Elwave 7.6.
MT4 platform has the facility to export data in csv file format to both GET and Elwave in respect of Monthly, Weekly, Daily, 4 hour, 1 hour, 30 min, 15 min, 5 min and even 1 min. Of course, these are not realtime data feed. Nevertheless, once these are input into these softwares, they will give you the Elliott Wave patterns and Wave Counts.
If you want realtime datafeed, you will have to contact either Esignal or Prognosis and these are subscription based.
I do hope you will be able to make use of these Elliott Wave chart patterns to assist you in your forex trading.
As I am now in the midst of preparing my article for today, I shall come back again later probably in the night to show you how to export the data from MT4 and then use them on GET or Elwave.
Until then
Kenneth
Meaning of CORRECTIVE Waves:
Financial Markets (be it stock market, forex market, commodities, etc.) will not go up or down forever. From time to time it will be punctuated with sharp retracements which Elliott Wave Theory labels it as CORRECTIVE waves.
When They Occur:
These Corrective waves occur at the end of Waves 1, 3 and 5 but the sharpest and normally the most destructive is that which occurs at the completion of the 5 Impulse Waves ie end of Wave 5.
Waves 2 and 4, in its strictest sense are NOT bear markets but purely retracements; when they are over, growth resumes but the CORRECTIVE wave that strikes AT THE END OF A BULL MARKET ie WAVE 5 is a BEAR MARKET, as it corrects the entire 5-wave cycle of market growth in a booming economy.
INTERESTING QUESTION:
An interesting question that arises is this: The last leg of a Bear market is a 5-wave pattern. Would you expect a SHARP REVERSAL upon its completion??? - a CORRECTIVE wave in reverse.
Readers are invited to give their opinions.
CORRECTIVE Waves:
In his book “Elliott Wave Principle Key to Market Behavior”, Prechter has devoted almost 14 pages to this topic, thus emphasizing its IMPORTANCE and COMPLEXITY nature.
There are only 4 main categories of Corrective patterns (details of which are given below). That's all, you say. It does not seem to be complicating.
It is not as simple as we are led to believe.
Difficulty in recognizing which category it belongs in its initial stages of formation gives rise to trading problems, and once a trade is entered, and the chart unfolds into complex patterns as market conditions keep on changing, you wish you had stayed aside in the first instance.
GET and Elwave – Corrective Waves:
In many of the GET charts that I have posted each week, we have seen for some of the currency pairs, it initially displayed a CORRECTIVE Wave A/B/C and when Wave C is over, you think a new Primary Wave trend will start – pop – it becomes another A/B/C and then another A/B/C. So far, it is common to see 3 sets of A/B/Cs ie Combinations.
In Elwave, it is even worse. It is a common place to see all sorts of categories coming out from single Zigzag to Triple Zigzag. And Double Three and Triple Three Combinations are no less uncommon.
CORRECTIVE Patterns: Four Main Categories ie
Zigzag containing 5-3-5 waves ie Internal Structure
Single, Double and Triple
Flat containing 3-3-5 waves
Regular, Expanded and Running
Triangle 3-3-3-3-3 waves
Contracting Variety – Ascending, Descending and Symmetrical
Expanding Variety – Reverse Symmetrical
Combinations:
Double Three (ie W-X-Y) and Triple Three (W-X-Y-X-Z)
What To Do:
Can a trader trade Corrective Waves. Of course, you can PROVIDED you are skillful in the interpretation of all these Corrective patterns and able to see through what pattern it is going to emerge and you are prepared for a prolong period of price adjustments. You move with the Internal Structure of the pattern, knowing your risk and reward. (In Triangle patterns, you will be trapped with rewards getting smaller and your stop loss closer to your entry points.)
However we have another school of thought – that in these complex circumstances it may be advisable to stay away – and I belong to this class of traders – Stay Aside when the pattern is in CORRECIVE mode as there are too many patterns involved and may prove a hassle to some of us.
Kenneth
First time use the software
Thank you Kenneth
I did follow your instruction with .csv file and the result as below:
They are not quite clear with Get 7.8 and elwave 7.6. I have to practice these software more, maybe.
Thanks for your help again !
Michael
Attached are the charts for the 5 currency pairs.
With my article on “Difficulty in Trading Corrective Waves and Why?” over the weekend, today I have intentionally revert back to GET's ORIGINAL settings (ie their default setting) for the purpose of illustrating that GET, in its default setting, frequently displays Corrective waves.
EURJPY:
You will note that for EURJPY, its Long Term setting displays it is going into Wave [5] (as per Fri chart posted) but for its Original setting now displays it is going into 4 sets of A/B/Cs. Perhaps this is the first time readers are seeing this.
Q: Can we trade the Original setting of Corrective Waves with 4 sets of A/B/Cs???
A: Yes and No.
It is “No” for conservative traders as it is in Corrective mode and advisable to avoid trading.
It is “Yes” for traders who are familiar with Corrective patterns and are skillful looking at chart patterns. From yesterday's article, we know we have (1) Zigzags, (2) Flats, (3) Triangles and (4) Combinations. (If you do not know how these patterns look like, you need to do a Google Search or read Prechter's “Elliott Wave Principle – Key to Market Behavior” as suggested by Gann68uk.)
With Zigzags, Wave C goes beyond Wave A.
With Flats, in a Regular Flat, Wave C is EQUAL to Wave A.
Triangles have shrinking/decreasing Daily bars, whereas Combinations contain a few sets of A/B/Cs.
Excluding Triangles, the MINIMUM PATTERN for EURJPY is a REGULAR FLAT with Wave C equals to Wave A.
Conclusion for EURJPY: At the minimum, Wave C will be moving towards Wave A and that is why I am suggesting for myself a BUY. And this is also reinforced by the fact that the Long Term setting displays it is going into Wave 5 Up. So in this case, it does not matter for a short term trader doing day trading whether it is Original or Long Term setting, this pair WILL BE MOVING UP. And once I hit my TP of 30-50 pips, I will close my position.
EURUSD: Back to its Original setting, chart shows it is PRIMARY WAVE [5]. I am suggesting to STAY ASIDE as frequently after Wave [5], it is going into an A/B/C Corrective mode.
GBPJPY: Whether it is Original setting or Long Term setting, this pair will GO DOWN and a Sell will be the trade.
GBPUSD: It is showing Primary Wave [3] in its initial formation. I shall wait until prices break through the previous Wave [5] level, then only will I move in to Buy. Let it gather more strength before making our move.
USDJPY: I am Staying Aside. It is in Corrective mode, having completed its first A/B/C. Since GET frequently generates a few sets of A/B/C, it is likely to move down to the first leg of its second set of A/B/C – ie a Wave A Down. I would not take a chance on this today.
General: My focus today will be on EURJPY and GBPUSD. It is NOT my practice now to enter on Pacific Open BUT rather wait for a while to make sure prices are moving in the direction of the chart, then only will I make my entry orders.
Kenneth
As per my posting this morning, we expect this pair to move up at least to the level of Corrective Wave A, I Bought this morning EURJPY at 133.89 and Sold at 134.19 making a gain of 30 pips within half an hour.
Nowadays I have scaled down the size of my order to 0.5 lot as I am gradually focusing more on the Malaysian stock market as we are experiencing a Long Term Primary Wave [3].
Later will attach details of my transactions.
Kenneth
As per my posting this morning, we expect this pair to move up at least to the level of Corrective Wave A, I Bought this morning EURJPY at 133.89 and Sold at 134.19 making a gain of 30 pips within half an hour.
Nowadays I have scaled down the size of my order to 0.5 lot as I am gradually focusing more on the Malaysian stock market as we are experiencing a Long Term Primary Wave [3].
Later will attach details of my transactions.
KennethAttached is the doc file containing my trades for last Fri and today.
When you hit your TP or when you see the market started to weaken or go against your trade, as per technical tools, you close your trade.
Kenneth
Thank you Kenneth
I did follow your instruction with .csv file and the result as below:
They are not quite clear with Get 7.8 and elwave 7.6. I have to practice these software more, maybe.
Thanks for your help again !
MichaelHi, Michael:
Thanks for the feedback.
You did pretty well to be able to produce the Elliott Wave counts in both GET and Elwave.
I would suggest you go through their User Manuals to get the most out of these softwares.
You now have two good technical softwares to help you in your forex analysis plus whatever you find helpful in this thread.
Good trading
Kenneth
Did my second transaction today on EURJPY.
Bought at 133.93 GMT 02:58 and Sold at 134.17 GMT 03:48 making a gain of another 24 pips within 50 minutes.
Total gain for the day was 54 pips.
Attached are the details of the transaction.
Kennet