D4rkEnergy is back with an educational post about Elliot Wave-Theory. Yesterday, Philakone, a famous crypto-trader and TA-educator, was calling out one of the Top Authors in here, because he could not figure out how to draw lines. Philakone wrote the following on Twitter:
"How to NOT draw Elliot Waves. it blows me away... this guy has one of the highest reputations on tradingview, and his elliot wave is shit. Ignoring the most BASIC rule of elliot wave in zig zags..."
D4 is not here to create drama. D4 is not here to get enemies. D4 is only here to spread love and wisdom. He wants everyone to have success, therefore he decided to make this basic guide to Elliot Wave Theory. It is pretty complex if we go into the smallest details, but let us keep it basic for now.
We are here looking at the 30 min BTCUSD Chart.
ELLIOT WAVE THEORY
Ralph Nelson Elliott developed the Elliott Wave Theory in the late 1920s. He believed that stock markets was traded in repetitive waves and cycles. According to Investopedia this method gained popularity in the 1970s. Traders try to identify these waves and patterns, because it can help them predict the market.
- 1 Cycle contains in total of 8 waves. 5 waves (1-5), which follows the trend, and then a correction pattern A, B, C. We also call this a 5-3 pattern. - Wave 1, 3, and 5 are impulse waves up - 2 and 4 are correction waves down - A, B, C are the correction
As you can see, Inside every wave we can have smaller waves, also called sub waves.
Basic rules:
1. Wave 4 always have to be above wave 1. 2. Wave 3 can never be the shortest.
If these rules are broken, we have what we call an Elliot Wave failure. And therefore it is not a real Elliot Wave Cycle.
This was a really short introduction. D4 encourage you guys to dig deeper into this!
D4 loves you <3
And as always. Please follow D4 and give a LIKE, if you liked the analysis. It is much appreciated. Thanks in advance, my friends!
Komen
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JUST TO BE CLEAR!
No hate here at all. D4rkEnergY loves Philakone and all the other Top Authors in here. So please refrain from any kind of drama. We all make mistakes.
PEACE!
Komen
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All the guidelines:
• Impulse wave subdivide into 5 waves. In Figure 2, the impulse move is subdivided as 1, 2, 3, 4, 5in minor degree • Wave 1, 3, and 5 subdivision are impulse. The subdivision in this case is ((i)), ((ii)), ((iii)), ((iv)), and ((v)) in minute degree. • Wave 2 can’t retrace more than the beginning of wave 1 • Wave 3 can not be the shortest wave of the three impulse waves, namely wave 1, 3, and 5 • Wave 4 does not overlap with the price territory of wave 1 • Wave 5 needs to end with momentum divergence
A clarifying update. I can see, that a few people believe that, this is also D4s prediction for how BTC will behave in the future. This is only for educational purpose to show how Elliot Waves behave, and how to follow the guidelines. We just used the BTCUSD Chart as an example.
It also came to D4s attention, that somebody disagree, with which wave we are on. And that is really great!
We always want to keep our eyes open for all opportunities. There are both arguments for we are on Wave 4 now. There are also good arguments for why we are in the middle of an ABC-correction.
Thx!
- D4 is everywhere - D4 predicts everything
Komen
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Update from earlier - are YOU a good Forecaster? Stay tuned. You will soon get the 2 most likely Bitcoin-scenarios.
Komen
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The 2 most likely Bitcoin-scenarios. And The Chosen Ones!
not really convicted about elliot wave theory. if u follow ichimoku, can see that Tenkan and Kinjun are about to cross down & EMA 50 and 200 about to cross also. so it should down soon.. but i hope you are right !
keep up the good work.
EIP-EverythingIsPlanned
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ur prediction has turned out to be incorrect; i have lost money d4rk
D4rkEnergY
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@yshashmi37, Im sorry to hear, that you think this is a a prediction. I have clarified this in my update.
A clarifying update. I can see, that a few people believe that, this is also D4s prediction for how BTC will behave in the future. This is only for educational purpose to show how Elliot Waves behave, and how to follow the guidelines. We just used the BTCUSD Chart as an example.
It also came to D4s attention, that somebody disagree, with which wave we are on. And that is really great!
We always want to keep our eyes open for all opportunities. There are both arguments for we are on Wave 4 now. There are also good arguments for why we are in the middle of an ABC-correction.
Thx!
Mikelikescrypto
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@yshashmi37, If you were a good trader you'd take low risk trades and would have only lost a small amount if it failed.
portfoliox
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Elliot wave in crypto is useless in most of the times!
BigBuxTrading
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@portfoliox, agreed - and WHY do we realize this???? Because Crypto IS Gambling!!!! WAKE UP PEOPLE!!! Once people realize that all of this nonsense about patterns and trends and every other convenient excuse or "perceived reason" to take or not take an action - because it fits in with our bet/guess - is all pure crap, then maybe we'll understand that there are just too many variables or uncontrollable influences to create "a reason" for this stuff to do what it does.
Investing? Trading? yea right.... too many uneducated people filling the bank accounts of the controlling "whales"... there's no rhyme or reason with Crypto - just take a shot at a call one way or the other and place your bets - it's called Gambling... you guys are just trying to legitimize the reasons why you make the bet.
Good Luck....
GStack
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@sdubyag, False. Winner's mindset: "This is hard, let me work hard to figure it out and find a way to win." Loser's mindset: "This is impossible. It's a matter of random luck. I should give up."
BigBuxTrading
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@GStack, lol, not being a jerk here, but the winner/loser thing - fantasy land, Tony Robbins thinking.... "work hard to figure it out" huh? The real problem here, at this infantile stage of crypto's existence, it's an exercise in futility to "figure it out" when it's an unregulated system... Bots, Whales, unforeseen BS news FUD, the list goes on... Believe me, I'm in it to win it my friend, no giving up here, but I'm also a realist that understands this - you can chart your predicted course with patterns and theories to help your psyche in justifying your chosen position, but everyone can't be correct!
slctr
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@sdubyag, Every game of probability is a gamble, driving to work is a gamble by that definition.
Ofcourse, crypto having no or premature real world use case is much more speculative/"gambling like" than some other asset classes.
Therefor there is nothing that needs to be legitimized. People take a trade (or "bet") believing the odds are in their favor.
TA is just a tool to find out what the odds might be, without any guarantee of outcome (yes, even EW, some fanatics will beg to differ).
I agree I have concerns about fraudulent manipulations, maybe by exchanges themselves (Tether inflation perhaps) but at least there are things pointing in the right direction as things mature!
Believing in more growth for crypto so taking that trade!
keep up the good work.