NZDUSD short

In my previous post I counted the NZDUSD to be in an ending diagonal and it did exactly as planned.

We didn't see an impulse-consolidation-impulse which means that it can still make a new high. Nevertheless it looks impulsive again. So I will therefore be looking for a significant consolidation and then sell the continuation for a move below 0.620.

www.facebook.com/wwwtimstuytscom

Comment:

Guy's when dealing with an ending diagonal you have to be careful, any technical analysis course will teach you that this is a reversal pattern, for example an harmonic three drive. However trading is not a popularity contest and there is a reason 95% of the retail traders loose so don't follow the herd or think that the market moves because there is a pattern. If you understand structure and Advanced Elliott Wave you know that these kind of patterns can go on and on to stop many traders out before it actually reverses. The wave 3 might be a smaller wave and shift to the right, wave 5 in green might therefore in fact be a wave 3. So if you want to become a professional trader (success ratio of more than 85%) you need more than just a system or follow textbook examples.
I will share a guideline with you that you need to keep in mind once you spot such an ending pattern, it almost always goes hand in hand with a zig-zag correction (A= 5 waves, B= 3 waves and C=5 waves), We should therefore always be waiting for a three wave correction after an impulse and sell the third leg, only once that leg breaks below wave 4 of the ending diagonal (in green) we can say with more than 90% certainty that the ending diagonal is over. Otherwise manage the position and keep in mind that we might make another high once again.

If you are motivated to study in depth market analysis follow me, my website will be launched in September.

www.facebook.com/wwwtimstuytscom

Comment:

Comment:

We didn't get the short confirmation and price extended once more.

Comment:

As mentioned before an ending diagonal goes often hand in hand with an ABC zigzag correction, let the first impulse settle and sell the third wave. If we see no such thing keep in mind that price can make a new high once again.
The red dotted lines are major contraction zones so use this in your advantage when either looking for buy or sell signal.

Comment:

I would be looking for a 1-2-3 reversal pattern. However for this to become high probability I like to see at least a correction of 38.2% and preferably more. Then sell the break.

Comment:

1-2-3 reversal pattern within the correction for aggressive entry.