The Missing Link, Part 1 by Mircea Dologa
Waves & Boxes
The relationship between time and price has a direct
influence on trading profitability. Here’s a look at
how you can gain an insight by looking at the euro
and the Romanian leu.
As traders progress along their learning curve,
they begin to clearly observe the influence
of the time/price relation in identifying the optimal
trading setup. In spite of this, some traders — novices
and experienced — always start the learning process
with only price tools and their corresponding indicators,
that is, classic technical analysis. Sooner or
later, the successful trader will reach an advanced
stage where learning the importance of time and its
usefulness becomes a priority in the quest to further
develop and acquire the much-sought-after professional
The evolution of a trader
In the early stages of becoming a trader, we are all
motivated to learn tons of techniques and indicators in
order to perform the most profitable trades. We quickly
observe that if the right approach isn’t selected, we
are in great danger of losing our trading capital.
Over time, I began to realize that studying and applying
Elliott waves, Gann methodology, and mapping
multiple time frames (top-down analysis) are
a prelude to any final decision-making. Once this is
done, the next step, which is the detailed study of the
specific market you are trading, comes naturally. You
can then identify the optimal time frame setup that
works for you, one that consists of the most efficient
elements of modern technical analysis.
Establishing the trading context
Before I describe my time & price technique, I will
briefly present and revisit some of the basic elements
that contribute to its performance.
In spite of the so-called subjective labeling that
many traders give to Elliott waves, I have been successfully
using them for more than 20 years. Many
traders misunderstand the usage of these waves
mainly because of the lack of a probabilistic approach.
Without probability, there wouldn’t be a successful
trading technique — classic or modern.
Your profitability is influenced and coordinated
by the time & price relationship. You cannot label
any type of pattern without first verifying several