We have all heard of Elliot Wave, but what is it? It is a five wave structure, made of 3 impulse waves up with 2 corrective waves within the pattern. After the 5 wave there is usually an ABC correction. After wave 5 has completed it is ok to pull Fibonacci lines to see where the correction may fall to. We are looking for support to place a buy order where we think a bounce will occur. I chose my buy zone in the golden pocket, a nice little area between the 0.615 and 0.50 Fib levels.
The wick on bottom of long candle is worth noting, considering it is resting on both the 0.50 Fib line and the white EMA line. Double support is twice as strong of a support. I expected it to drop regardless. The overall trend has been... you guessed it, Dowwnnn
I decide that due to lack of general bullishness, it would fall near the 0.618 Fib Retracement level. Why not, after all its a magic number. Its worth taking another note here that we have a third support. The Fib Extension Tool shows me a support on the 0.618 as well.
You'll also notice that I using different time frames. Its good to try and keep up with up to 3 different times frames so you can gauge whats happening from short, medium and long range. Any more than that and its counterproductive most of the time. Remember that small trends(lower times) add up to big trends. That is how that works..Do not ever bet against the big picture. We are in a bear market right now.
This is exactly what I am waiting for. This is where I begin layering in my limit buy orders. Layering basically is buying in nibbles on the way down. My nibbles always tend to be larger the further down I go. This is my way of "dollar cost averaging" my way into the trade. Doing so helps manage my risk. My average buy price gets better the further down we go.
We would touch bottom of my green box. We found great support here. This is what we play the game for. I was so happy to see my orders fill. The MACD indicator is getting ready to cross while the histogram on MACD is diverging bullishly. The Relative Strength Index or RSI is showing a double bottom on 2 time frames and a triple bottom on a 3rd. On this picture the RSI on bottom is gaining higher highs in addition to its double bottom bounce off of a low RSI of 19, a great sign. I am excited because I know I hit it just right and the stars are aligning. Stop-loss is in place. Already in profit I now know the we must break through that 5.06 yellow line. That line happened to be another important FIB level...we bounce off and head down. What happens next?
Gaining Steem!
I love Steem, many of you know this by now. We had a brief fall into the buy zone again, but we will not sell. We are not scared. We know what is happening. We are strong!! We hold as the bulls completely reject it and push it right back out out there. A hammer candle forms. A hammer candle looks like a hammer lol. When it is found at the bottom of a move downwards it is a powerful signal that a reversal is going to happen. Especially so close to an important FIB level This candle signaled to me that we are going up now! The latest candle is supported by that white EMA line...Great!!
As always trading requires discipline and there will be uncertainties and doubts. I don't care who you are, if you want to learn how to trade...you will!! This statement I will now give you works for anything in life......The only difference between not knowing something and knowing something is that you will know when you choose to know and then you'll know forever and NO ONE can take it from you...think about it
If you like my style or want to learn more then you should know I plan on instructing traders and blogging quite extensively about indicators and all kinds of useful trade knowledge. I will record videos as well. You are welcome to join me on our wonderful journey
*** These pictures are mine, these charts are mine. You will not find them anywhere else. These are my feelings and own opinions. I win and lose trades, just like you. Please be careful in the markets and as always... Do your own research and invest wisely!!***
