this is my most favorite EW pattern
it is called Ending Diagonal
it appears at the very end before trend reversal
it consists of 5 waves down (white labels) but each of waves
are not regular 5-wave sequences but 3-wave ABC structures
zigzags of red and green colours show it
wave 1 is usually the largest - it is in the chart
wave 3 should not be the shortest - and it is not in the chart
wave 5 is the smallest and sometimes overshoots the trendline support like we see
in the chart
How to trade it?
Signals
watch RSI making a Bullish Divergence
for the initial signal, watch how first bullish impulse breaks up the peak of wave 4
then wait for retracement, which should stay above the valley of wave 5
Trigger
the final trigger is set at the peak of that first impulse which crossed over the top of wave 4
when the price surpasses it after retracement it is good to buy
Reward and Risk
target is set at the start of the Ending Diagonal (it's the peak of wave 4 of higher degree)
stop should be put a the bottom of retracement preceding the trigger
it is called Ending Diagonal
it appears at the very end before trend reversal
it consists of 5 waves down (white labels) but each of waves
are not regular 5-wave sequences but 3-wave ABC structures
zigzags of red and green colours show it
wave 1 is usually the largest - it is in the chart
wave 3 should not be the shortest - and it is not in the chart
wave 5 is the smallest and sometimes overshoots the trendline support like we see
in the chart
How to trade it?
Signals
watch RSI making a Bullish Divergence
for the initial signal, watch how first bullish impulse breaks up the peak of wave 4
then wait for retracement, which should stay above the valley of wave 5
Trigger
the final trigger is set at the peak of that first impulse which crossed over the top of wave 4
when the price surpasses it after retracement it is good to buy
Reward and Risk
target is set at the start of the Ending Diagonal (it's the peak of wave 4 of higher degree)
stop should be put a the bottom of retracement preceding the trigger
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.