Stocks & Commodities V. 24:9 (42-44): Trading Wave 3 by Mircea Dologa, MD
Product Description
Stocks & Commodities V. 24:9 (42-44): Trading Wave 3 by Mircea Dologa, MD
Trading wave 3 could prove to be the most profitable of all waves in Elliott wave analysis. Heres an example.
In my previous two articles, I discussed various techniques you could apply to trading while a wave 3 was in process. In this, the third and final part of the series, I will walk you through a trade so you can see how to utilize everything I discussed in the first two parts.
GETTING READY
1. Be alert to the possibility of an extended W3 trade
Identify the profitable low entry.
Price should be near the close of the previous day.
Price should gap down, opening below the close, then return above the close and fill the gap from the low of the day/morning, or vice versa. This is known as the oops phenomenon.
Price gaps down, consolidates for several bars, then fills the gap from the low of the morning/day. Again, you have the oops phenomenon.
Follow the price movement from downtrend to uptrend.
Once a low is formed, wait for an upswing in wave 1/A and its retracement of wave 2/B (38.2 50%). After the retracement, you can set up for the wave 3/C ride.
Be aware that a low may not necessarily be the starting point for wave 1, but rather the end of wave B of an ABC correction. Wave C will follow, taking the form of a terminal-ascending triangle. A similar situation might take place when an impulse pattern has a wave 5 failure. This will be a classic doublebottom formation.
Be aware of the formation of w1 of a future W3. It can coincide with the entry (as is the case in the example). The length of the move will give the tone:
o Five bars for a swing
o 13 bars for an average trend, and
o 2134 bars for an extended wave.
Trading wave 3 could prove to be the most profitable of all waves in Elliott wave analysis. Heres an example.
In my previous two articles, I discussed various techniques you could apply to trading while a wave 3 was in process. In this, the third and final part of the series, I will walk you through a trade so you can see how to utilize everything I discussed in the first two parts.
GETTING READY
1. Be alert to the possibility of an extended W3 trade
Identify the profitable low entry.
Price should be near the close of the previous day.
Price should gap down, opening below the close, then return above the close and fill the gap from the low of the day/morning, or vice versa. This is known as the oops phenomenon.
Price gaps down, consolidates for several bars, then fills the gap from the low of the morning/day. Again, you have the oops phenomenon.
Follow the price movement from downtrend to uptrend.
Once a low is formed, wait for an upswing in wave 1/A and its retracement of wave 2/B (38.2 50%). After the retracement, you can set up for the wave 3/C ride.
Be aware that a low may not necessarily be the starting point for wave 1, but rather the end of wave B of an ABC correction. Wave C will follow, taking the form of a terminal-ascending triangle. A similar situation might take place when an impulse pattern has a wave 5 failure. This will be a classic doublebottom formation.
Be aware of the formation of w1 of a future W3. It can coincide with the entry (as is the case in the example). The length of the move will give the tone:
o Five bars for a swing
o 13 bars for an average trend, and
o 2134 bars for an extended wave.
FOR THOSE ORDERING ARTICLES SEPARATELY:
*Note: $2.95-$5.95 Articles are in PDF format only. No hard copy of the article(s) will be delivered. During checkout, click the "Download Now" button to immediately receive your article(s) purchase. STOCKS & COMMODITIES magazine is delivered via mail. After paying for your subscription at store.traders.com users can view the S&C Digital Edition in the subscriber's section on Traders.com.
| Take Control of Your Trading. |
| Professional Traders' Starter Kit |
| All these items shown below only $299.99! |
| Click Here to Order |