GbpNzd Its As Simple As That - forex trading signals tutorial

GbpNzd Its As Simple As That ~ forex trading signals tutorial

Look at the weekly chart of GbpNzd below, what can you see?.

The sell off from 3.7 to 1.75, a 19500 dip from 2000 to 2013. Is it a price movement in correction or motion (trend) ? Is the subsequent bullish move from 1.75 a correction of the bearish trend or continuation of the bullish trend?

All these questions can be answered by elliot wave theory.

Lets look at the following scenarios.

Lets consider the sell off as a bearish trend.

This is a very clear 5-wave decline and a rally followed immediately. According to elliot wave theory, a 5-wave  will be decline will be followed by a 3-wave advance. 

After the first rally, price is expected to retrace downward before advancing further to break the resistance trend line.

The chart below shows the second scenario

 

 

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The sell off could be seen as a long term double zigzag correction. Wave W = Wave Y which is a common ratio in zigzag corrections. Price will validate this wave analysis by moving higher and break the 3.7198 resistance in a very long term. The time taken by price to recover the sell off should be about two-third of the sell off time. 

The two charts above are advocating for more bullish move; the first as a trend and the second as a correction.

What IF price, responds more to the strong resistance and falls further to break 1.7522 low?. Elliot wave has something for that in the chart below.

 

The long term decline is seen here as the completion of the first 3-waves of an expected 5-wave impulsive move. 

 

According to elliot wave, the 4th wave should not trade in the region of the 1st wave. The 4th wave is bouncing off that region, thereby making this count stand. 

 

The horizontal and diagonal resistance could be too strong to be broken upside. Price could continue to move downward in a new journey and the next target will be 1.6240 (0.618 x wave 1) or deeper, but should be above 1.2 region ( region at which wave 1= wave 5 ).

This wave count will be invalidated if price breaks above the resistance.

If price breaks below 1.62412, there is high tendency that the recent bullish move and the subsequent  bearish continuation are parts of the larger term wave 3.

Wave 3 is known to usually be the strongest, so this count will support that. Price must stay below the trend line.

 

Price is expected to dive to 1.37 which is a strong fibo-confluence zone. 

Price will, to a great degree of certainty, validate one of these forecasts. Are we to be confused by these forecasts. Capital NO.

This is an information in our hands. Elliot wave theory has helped us with varying ways of seeing possible price movement. 

Anyway price moves, we understand the language and adjust with confidence.

How do we profit from this? We simply look for the completion of elliot wave tradable patterns in the lower time frames that goes well with any of these analysis, set a profit and get out. 

We dont have to trade the forecasts, we simply trade the patterns.

Im already in a sell position from 2.3677 , targeting  2.3000 due to a pattern I recognized in the hourly charts.

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Tripple Zigzag In EurGbp - top 10 forex trading signals

Tripple Zigzag In EurGbp ~ top 10 forex trading signals

The analytical chart below shows the dip of EurGbp from 0.98 to 0.695; a dip of more than 2800 pips in a period of  5 and a half years.

 

Prior to this dip, there was an advance from 0.566 at the beginning of this millennium (2000); that was more than 8 years.

It is clear that price reversed from 0.98 and still going southward. Few questions that might cross our minds include the following:

1. Is the bearish dip a trend reversal or correction?

2. If its a correction, where and how could it end?

The two questions above can be answered by elliot wave theory to a great deal of accuracy.

 Elliot wave theory clearly distinguished between a correction and a reversal. A reversal is called a motive wave while a correction is called a corrective wave. 

These waves are arranged in recognizable and calculated patterns.

The bearish dip in EurGbp does not look like a motive wave, its a clear corrective wave, a deep one, retracing deeper than 50% of the preceding bullish trend.

If the dip is not motive, what corrective pattern does it form and what do the internal waves and other projecting tools project for its terminus?

Does the diagram above look like the dip in Eurgbp? Yes it does. What do we call this pattern?

Its the triple zigzag corrective pattern. Its a very deep pattern that tends to retrace close to 100% of the prevailing trend.

This pattern is similar, in the way it looks , to a 5-wave impulsive move ( a motive wave). But there is a big difference between them.

1. In a 5-wave impulsive move, wave 3 is never the shortest while this is not important in a triple zigzag. In fact in the Eurgbp dip we are considering, this is the case.

2. In a 5-wave impulsive wave, wave 1,3 and 5 are motive waves and 4, 5 are corrective; while in triple zigzag, two or three of the motive waves are zigzag or double zigzag patterns.

The chart above is the elliot wave analysis of the dip and its more probably going to end as a double zigzag pattern. If this pattern holds, we could see Pound sterling strengthening  against the Euro in about a decades time. 

How that will happen, we dont know. Different news and events are going to surface to confirm this move.

Elliot wave theory has answered the first question. The dip is corrective in nature and price should rally to continue the bullish trend.

Where and how will the correction end?

These could be answered using elliot wave and fibonacci tools. By the recent triangle breakout ( knowing that triangles usually precede the end of a trend or correction), price is expected to complete the 5th wave in a a 5-wave motive wave pattern. 

Using the entension and projection fibonacci tools, the long term bullish move could start at 1.674 region or 1.64 region.

Only time will tell how price confirm this forecast. Our responsibility now is to watch price behaviour, incorporate in our wave count and wait for the completion of a tradable pattern

I will post an update.

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