Whatever you do…

Do not fade a Wave 3!

This is the number one lesson in trading.

Need I say how important it is to get the wave count right?

I myself counted this up move as a wave 3 (of Wave 5), but not as a Wave 3.

The difference is that I closed out all of my longs at the mean and called it a day, missing out on 1/2 of my potential gains and making merely 7.5% this week.

The problem is that I am Mr. Wave 2, and I managed to mess up the count while I have already made an algorithm (an indicator, and I never called an indicator an algorithm before, but this one is a beyond eloquent solution) back in July, last year.

In fact, if I were only paying a bit of attention to one of my charts, I could had spotted this easily:

(the actual low was 1.10165, but remember, you want to get a fill)

Imagine how much money you could had made with this sure shot call that counts back two dojis, factors in a 4-pip dip and tells you where the Wave 3 could fizzle out, leveraging you a guaranteed 70 pips in a matter of 10 hours from your fill.

Now comes the lesson about the difference between a Wave 1 and a Wave 3.

There are only two resistance zones that are capable of turning back an impulsive wave structure.

The Fluctuation Maximum or Sound Barrier (Brownies) are measured from the last swing low / swing high from the other side of E-16 (in blue).

This image shows W1 failing to take out the last sound barrier, while Wave 3 managing to overcome it and even use it as a spring board.
The second resistance zone for a Wave 3 would be the far end of the daily fuel limit (in orange) and a bit beyond (+9 pips or so).

If you want to get better in getting the wave count right, start plotting a 9-sample stoch D on the hourly.

…now I need to get back to my train of thought trying to figure out why don’t some plots appear on Darwinex with the same version of MT4, and why my croppers remain idle without any errors.

A new section is in works on the blog marketing all software assets at real cheap and as a lead up I have a video planned around the Full Lambda Auto trend lines that should blow the lid off most people. See you soon!