HOW WAVE PERSONALITY RIVALS SENTIMENT AND TRADING PHYCOLOGY OF TRADERS-FOREX IMPULSE WAVE AND CORRECTIVE WAVE.”The big boys are selling today”In this article, I focus on the study of Impulse wave & Corrective wave personality which brings human behavior more personality into the equation. also we learn-
MARKET SENTIMENT MEANING IN FOREX
- Study of Wave personality of corrective wave.
- Market spend 60-75% of its time on the corrective sequence.
- Labeling of corrective waves requires greater study and practice due to the range of easy to complex structures.
- Study of wave personality of an impulse waves.
WAVE PERSONALITY OF CORRECTIVE WAVES:
WAVE SENTIMENT A
- Retail traders see this as a minor pullback before the Impulse uptrend continues.
- Professional traders see the major technical breakdown of trend lines as a start to bigger correction.
- Structure : 3 sub-waves or 5 sub-waves Or corrective waves.
WAVE SENTIMENT B
- Retail trader sees this Impulse Aggressive buying and selling within support resistances zone for a quick profit; often get trapped into sucker plays as B Waves are complex and directionless.
- Professional traders use these technically fundamentally weak times to build for the next larger move to the sell-side.
- Structure: 3 sub-waves.
WAVE SENTIMENT C
- Retail traders see these sharp changes in price as a start of a new trend and often enter too late.(impulse & Corrective)
- Professional traders in indecision fade away; see this as an opportunity to capture a large move that begins at the termination of wave C.
- Structure: 5 sub-waves.
A ZIGZAG CORRECTION ON IMPULSE WAVE AND CORRECTIVE WAVE:
- Wave A is made up of 5 or 3 sub-waves; Wave B is made up of 3 sub-waves; Wave C is made up of 5 sub-waves. I.e. 5-3-5 or 3-3-3 pattern.
- Deep correction as wave B only travels 50-61.8% of wave A, But wave C travels up to 161.8% of wave A.
- Trade entry: Termination of wave B.
Stop-loss: Below or above wave B termination.
Take profit or trade exit: Fibonacci Retracement zones.
- A zigzag correction mostly occurs at:
- (Wave 2 in a 5 wave sequence.)
- (Wave A in ABC sequence.)
Let’s look at a few examples of zigzag correction with video
FLAT CORRECTION ON FOREX IMPULSE WAVE AND CORRECTIVE WAVE:
- “Price is confined to support and resistance parameters of wave A within the flat correction”.
- Wave A is made of 3 sub-waves; Narrow retracement signal weak correction, unlike zigzag.
- Wave B is also made of 3 sub-waves; only retrace up to or below the start of wave A.
- Wave C is made of 5 sub-waves; only travel up to 100-138.3% Fibonacci extension. Retracement of wave A.
- Mostly occur a wave 4 position in an Elliott wave cycle.
- TRADE ENTRY: Termination point waves C confirmed by Fibonacci retracement zone.
- STOP LOSS: Below the low price of wave C.
- TAKE PROFIT: The end of 5 waves move within the next impulse wave.