EW in the medium to long term

EW STUDY


This is the way I comprehend the crrent EW scenario pertaining to Nifty.

Knowing this may not be of much use for our current trade.  But I believe, keeping this in the mind as a background information, I hope, will definitely help to manage ones trades scientificlly.

5119 - 6415 Wave I = 1296p
6415 - 5933 Wave II =  482p; correction is 38%
5933 - XXXX Wave III in progress

Break up of Wave I

Wave 1: 5119 - 6143 = 1024p - 16 days 
Wave 2: 6143 - 5701 =  442p - 8 days ZZ .  43%. Time correction 50%
Wave 3:5701 - 6343 = 642p - 23 days
Wave 4: 6343 - 5972 = 371p - 14 days Flat. 58%. Time correction 60%
Wave 5: 5972 - 6415 =  443p - 12 days

1+3+5=1024+642+443=2109 - a
5119 to 6415=1296 - b
a/b=1.62 

There were several overlaps. Therefore
Wave 1 to wave 5 = Total 70 trading days
Impulse 50 days; Correction 20 days.  Time correction is 38%.

Now:
At higher level Wave I is from 5119 to 6415 = 1296p; 70 days
Correcting Wave II is 6415 to 5933 = 482p; again 38%. 

The time correction lasted 40 days. 40/70 is 58%

Wave III from 5933 to XXXX is in progress. 22 days gone.

This throws up exciting probabilities.  We have to wait patiently to appreciate and to harvest.  If there are any bearish possibilities, they are irrelevant at present.

EW in ST

A five wave sequence in 3 days in ST

04.02.14, 9.30 5934 Starting point w0
w1 2.35  6018         84 points w1                                                         5 hours

w2 05.02.14,  10.10  5962 56 points w2;zz 0.61.8%=52+4 points         2 hours

w3 06.02.14,  10.10  6048 86 points w3 1=3, 84=2 points                    6.30 hours
0 to 3 = 114 points; Total 13.30 hours

w4 06.02.14  10.40  5966 82 points w4; flat retraced the wave           0.30 hours

w5 07.02.14,    9.20  6079 113 points equals 0-3 minus 1                   5.10 hours

Total time taken for the five waves is 19.10 hrs and covered 5934 to 6079; 145 points.

Correction 07.02.14, 2.45 6031 48 points 0.38.2%=55-7 p                  5.25 hours

w3 = w1
w5 = w0 to w3
w2 a zz and took longer time
w4 a flat and took shorter time

Thus, from the angle of EW,  this 5 wave sequence along with the correction appears to be perfection personified.

This 145 points is probably the first wave for the next sequence of impulse waves in the larger time frame.  Then the present correction would be w2 ZZ.

Trading Range

Trade Journal

It is surprising that for the past 33 days i.e., from 10th December 2013 till date, Nifty is trading in a narrow range of 150 points.  Of course, it closed below 6200 in about 10 days and went above 6350 on one day.  Therefore, it is just impossible to make any positional trade.  Worst still, for Option traders.  Did day traders make any money during this period.  I doubt very much.

The best one could have done during this time is to stay on the sideline, observe and learn.
I read and re-read Prechter and Ramki.  Also spent time with Osho.

Market is always there.  Let us wait for more appropriate opportunity. 

Random Thoughts

My trade Journal: EW Probabilities:

1) 4531 - 5630 = 1,100
2) 5630 - 4770 = 860 = 78% of 1
3) 4770 - 6112 = 1,310 = 1.2 % of 1
4) 6112 - 5477 = 635 = 48 % of 3 Overlaps wave one’s price zone
0 to 3 = 1700
5) 5477 - 6230 =   750 = 70 % of 1; 44 % of  0 to 3
Total up move 1 + 3 + 5 = 3,160 a
 4530 - 6230 = 1700 b
a/b = 1.85

The next best View:
3) 4770 - 6415 = 1645 = 1.48 % of 1 = 80 weeks
6565 would be 1.618 %
4) 6415 - xxxx .38 or .5% of wave 3 - wave 4 in progress.
wave 5 yet to commence 

1) 20.12.11 - 22.2.12 = 10 weeks
2) 22.2.12 - 4.6.12    = 16 w
3) 4.6.12 - 29.1.13      = 35 w
4) 29.1.13 - 10.4.13    = 11 w
5) 10.4.13 - 20.5.13  = 6 w


Perhaps, it is desirable to review the labelling

My Trade Journal

Entered on the short side yesterday;  There were two reasons:
             1. Day candle Belt-hold line and 
             2. MACD in hour t/f triggered on the downside.

No other signal is in favor of my entry.

Today I closed my position on no loss no profit level.  Later, realized my exit was wrong.  Before EOD Nifty traveled more than 60 points.  Once again, MACD cross over appears to be dependable.

My trade Journal

I trade only Nifty Options.

After accepting the lag the principles applied to know the direction:

1. Alignment of JNSAR and J10SAR
- If J10SAR is lower than JNSAR, then market is heading south
- If J10SAR is higher than JNSAR, then market is heading north

2. Look for Reversal Patterns
- Evening star; Morning star
- Hammer; Gravestone Doji; Hanging man
- Engulfing pattern
- Hook reversal - inside body.
- Dark Cloud Cover, Piercing pattern
- Crows and mounts
- Sanku - Three gaps
- Kicker Patterns
- Double bottom and double tops

3. EMA CROSS and REFLEX  POINT  for entry and exit

4. Hour MACD and histogram trigger and also divergence

5. Day MACD & Histogram bend and/or trigger and divergence

6. Divergence from oversold and over bought position in STS and RSI

7. VIX

8. ORB

9. Serial EMA’s

10.OI in Option Table

11. FII activity.

Greetings !

2014 has arrived.  Greetings. 

May God bless all with good health, long life and abundance of wealth.  May there be peace and harmony in the earth.

LV