Wanna know how I count my EWs?
I have a pretty easy method that validates my grand cycle count, and I'm convinced most Elliott wave practitioners don't do this, and hence come up with invalid wave counts, meaning they can get things very wrong!
Step 1: Look at large time frames.
I get a rough count based on the daily or weekly charts, so I can get an indication of what wave in our grand cycle we're in, and the general longer term direction of price.
Step 2: Look at smaller time frames.
Now this is a time consuming process, but it's my job, and I would not put large amounts of money into a trade I'm not 100% confident in.
I count EVERY subwave I can find within the chart. Start with the hourly, then repeat for the subwaves within the 15M chart, and if you're feeling sassy go for the 5M :)
It will look something like this*:
*This is rough, so I have failed to count EVERY subwave, but it's to give you an idea.
Step 3: Validate the count with Fibonacci levels.
So now I have the waves charted, I simply add the fibonacci tool from the start of the wave to the end of the wave. I can now see how far my next wave has retraced, to check if it lines up with the key levels on the fibonacci sequence.
I then do the reverse (ie. chart the fib. tool from the top of the wave down) so I can make sure my next wave lines up with certain levels, like the 1.618 or 2.618 levels.
If I see the price line up with these levels, I can further validate what wave we're in because the fundamental principles of EW have to apply.
Wave 3 is never the shortest, so I tend to look for at least a 1.618 level for it's impulse move. We could also call this 168% of wave 1.
I hope this isn't too confusing, as I'm just spewing out what's in my brain haha.
Step 4: Validate what wave we are currently in, and project the end of that current wave, whether it be an impulse wave or a corrective wave.
So looking at my example of Digibyte (DGB). All counts line up with EW principles, so now I can confirm we're in a grand cycle correction, and we're finishing up a subwave C.
Now this is where the beauty comes in with my strategy 😎 This is why people call me the guy with the crystal ball!
Can we count 5 waves down? Hell no!
This means that we know we haven't finished our current wave, and that we are more than likely gonna drop further.
This is where you fib tool becomes a way to print money.
Use your retracement, from the the last wave and now we can see where we have retraced to.
Is it a coincidence that the current price level is at the 1.618 region (meaning wave C is 168% of wave A?
Fuck no.
Am I a genius?
Fuck no. I just know how to read charts :)
What is interesting about this is that I have now perhaps CONFIRMED the BOTTOM of the current SUB-WAVE as I wrote this, which was pretty cool, and it's probably a really good learning curve for you guys :)
JUST FOR FUN:
Digibyte predictions:
Bottom: 350-358 sats
Short term target: 550 sats
Longer term target: 1200 sats
I'll check back on this in a couple of months, and if I'm right you guys owe me a few beers ;)
That's essentially my entire process for charting. Yeah I draw trend lines and use indicators, but only to confirm what I already think.
I think a trader has to be able to think on their feet, eyeball charts and make good trading decisions based on what they see spontaneously, or else you end up missing the boat, or worse, losing the whole boat 😂
Simple trading rule that will make you a fortune:
SHORT the end of wave 5 and go LONG on the end of wave 2.
That's if you can find them ;) Happy counting!
Hey! I love your post :) I think it would be really great to see you using your charting strategy live? Maybe a youtube video or something ? Anyway keep up the good job, looking forward to your next post.
I would love to, however I'm not from the States so my accent might scare people away haha.
Intrigued by the approach. Glad I found you off that reddit thread. Upvoted and followed!
Thanks very much buddy. Followed back :) I hope I can help make you some profit!
Likewise. I'll keep an eye out for your posts.