Today is Sunday which means it the great time to look at the week ahead and see which pair are we trading, looking at the image we can see that we a had 5 motive waves upwards then 3 corrective wave (a,b,c), I believe that the correction pattern has been completed, if not our invalidation point will be the place where we will be sure that we were wrong in this trade. Looking at the image we can also see that we have started wave 3, as I taught you how to use Fibonacci extension tool to forecast the end of wave 3 we can see that we still have a lot of pips to gain here. please note that if the price reaches the invalidation line we will need to double check out counting. To trade this I will buy it now and place my stop-loss at the invalidation line because as I said before a stop loss should be placed at a point that tells you that you were wrong. In this trade, I will probably get a risk to reward of around 1:3 which is not bad.
LONGER TIME FRAME
Let look at longer time frame now, I like having the bigger picture of the market. it helps me to know where I am, where I’m coming from and where I’m going. just sort of like past present and future of the markets. looking at the weekly chart we can see that we are in wave 5, wave 4 ended nicely following our rules. if you don’t know our rules you should go through the course but ill tell you this time, as an Elliot waver you must know these rules by your heart. The rule is that wave 4 should not touch the price area of the end of wave 1, if you check your charts you will see that it didn’t touch it, so we are good there. if the pair keeps on dropping and touch the price we will know we need to double check our counting. As the first chart showed you we are at the start of wave 3 in wave 5 on the longer time frame. if you zoom in your chart you will also see that the whole chart above is just wave 1 on a bigger scale like monthly time frame.
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