**ignore my placement of waves IV and V, I am not predicting those targets yet.
Continuing my previous wavecount. The points were drawn on the 1hr chart, which is why they don't quite match up. The use of the 15 minute chart is only to refine points of exit/entry.
"Quite often you will see a wave 5 that is equal to wave 1, or 61.8% to 76.4% of wave 3" --http://stocata.org/ta_en/elliott7.html
These two ranges are represented by the two blue zones. There is a very beautiful overlap with the fibonacci R2, so I would consider this a very high probability target at which to take profits. We also will not be suprised to see wave III poking out the top of the major price channel, and wave 5 not quite reaching the top of the minor channel. I am a bit wary of how there seem to be more than 5 waves in the triangle, but they could just be convoluted zigzags.
We are also in the midst of a Bollinger Squeeze.
Edit: I'll also add market sentiment to my argument, as there are many published charts here that predict the next short opportunity at or around $492.
Edit 2: I did end up using the more aggressive stop-loss, and am now stopped out of this trade.
Some alternative scenarios if my wavecount is off:
1) We are actually in wave IV right now.
2) This is actually wave C of a larger retracement, where a bullish breakout in which we fall back down to stop-loss without hitting the profit target is possible. I will be keeping an eye on this.
Plan:
Entry: Entering now, or waiting for the breakout to occur (more conservative) both seem reasonable. Entering now allows me to improve my risk/reward, as I wouldn't be able to raise my stop-loss (much) even if I waited for a bullish breakout.
Stop-loss: Just below the shiney new pivot point. Agressive stop loss could be placed between the pivot and the bottom of the symmetrical triangle to improve risk/reward, though.
Take profit: $492.80
Lesson learned:
I'm unsure if my initial reasoning about entering the trade early to improve risk/reward is correct. This trade alone might convince me to not enter a situation like this until the breakout actually occurs, but what about placing stops too tight? If I had used two aggressive stop orders to enter in the direction of breakout, I could just as easily have been 'reverse whipsawed' into a losing trade. It also appears as though a different triangle has not yet completed on the 1 hr chart, so perhaps I should be more careful to only define the waves on a single timeframe. It's tough to think of a lesson to take away from this without succumbing to results-oriented thinking. Hungry for advice on this one!
Continuing my previous wavecount. The points were drawn on the 1hr chart, which is why they don't quite match up. The use of the 15 minute chart is only to refine points of exit/entry.
"Quite often you will see a wave 5 that is equal to wave 1, or 61.8% to 76.4% of wave 3" --http://stocata.org/ta_en/elliott7.html
These two ranges are represented by the two blue zones. There is a very beautiful overlap with the fibonacci R2, so I would consider this a very high probability target at which to take profits. We also will not be suprised to see wave III poking out the top of the major price channel, and wave 5 not quite reaching the top of the minor channel. I am a bit wary of how there seem to be more than 5 waves in the triangle, but they could just be convoluted zigzags.
We are also in the midst of a Bollinger Squeeze.
Edit: I'll also add market sentiment to my argument, as there are many published charts here that predict the next short opportunity at or around $492.
Edit 2: I did end up using the more aggressive stop-loss, and am now stopped out of this trade.
Some alternative scenarios if my wavecount is off:
1) We are actually in wave IV right now.
2) This is actually wave C of a larger retracement, where a bullish breakout in which we fall back down to stop-loss without hitting the profit target is possible. I will be keeping an eye on this.
Plan:
Entry: Entering now, or waiting for the breakout to occur (more conservative) both seem reasonable. Entering now allows me to improve my risk/reward, as I wouldn't be able to raise my stop-loss (much) even if I waited for a bullish breakout.
Stop-loss: Just below the shiney new pivot point. Agressive stop loss could be placed between the pivot and the bottom of the symmetrical triangle to improve risk/reward, though.
Take profit: $492.80
Lesson learned:
I'm unsure if my initial reasoning about entering the trade early to improve risk/reward is correct. This trade alone might convince me to not enter a situation like this until the breakout actually occurs, but what about placing stops too tight? If I had used two aggressive stop orders to enter in the direction of breakout, I could just as easily have been 'reverse whipsawed' into a losing trade. It also appears as though a different triangle has not yet completed on the 1 hr chart, so perhaps I should be more careful to only define the waves on a single timeframe. It's tough to think of a lesson to take away from this without succumbing to results-oriented thinking. Hungry for advice on this one!
