Leading diagonal or many call it a wedge is a "narrowing of prices" till if we connecting between waves a wedge will be seen. Some people said it was not Elliot that describe the pattern but Frost and Prechter so it is included only in "modern" Elliott wave theory.
Slowing of prices occur as wave 3 and 5 develop or in the other words the price movement occur fastest in wave 1, slow in wave 3 and slowest in wave 5. However complying to the Elliott wave rule, the wave 3 wouldn't be the shortest wave.
Leading diagonal have 5-3-5-3-5 subwaves while the ending diagonal have 3-3-3-3-3 subwaves. The rules are narrowing of prices which can be seen as two converging lines ( a wedge). The wave 4 OFTEN overlap with wave 1, It occur as part of motive wave 1 or wave A of a zigzag in places.
Back to Euro/Dollar moves from 140.45 to 143.36. Generally it looks like an OVERLAPPING waves so this can be a CORRECTION from 800 pips down from 149.xx or a DIAGONAL ?
If it is a leading diagonal so it support the start of wave 5 in my previous daily count which noted that 149.xx was a wave 3. If it is a corrective so we are going to see more move down from breaking the lower lines so to suggest that 140.45 to 143.36 is a Triangle.
Looking deeper the inside of subwaves will unlock the story behind all this mystery but as ALWAYS a look deeper will suggest more complicated discussion and at last a mystery is always unpredicted till it reveal itself.
What a possibly see now could be a leading diagonal, so after the retracement breaking the lower trendline, a move up till confirmatory above (i). If it is a corrective triangle after a break of the lower trendline, a move down further will occur below 140.45.
The safe side is to wait and see ( a safe play mean no trade). But most of us won't wait and see because we are energetic people and risk taker. So Good Luck!
Re-included 1H chart of euro dollar with a suggested Leading Diagonal ? OR NO.
No comments:
Post a Comment