Actually, you need to understand EW. Those trades worked
out, here's why
You have to understand EW and I talk about this in the write up:
When you have 5 waves down, that move down is either wave A or 1.
Wave A would be a bullish pullback, while wave 1 would be the
bearish case.
However regardless if it's wave 1 or wave A, you will still get
an oversold bounce in wave B or wave 2. Short the oversold
bounce. Now under the bullish case the next pullback would be
wave C, which would still be winning trade, but obviously not start
a major downtrend.
In July 2009 for example, you had an ABC pullback, under my
scenario you would have shorted the wave B bounce, you then got
another decline in wave C. How did that not produce a winning
trade?
See my attached picture
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Actually, you need to understand
Elliot Wave, shorting oversold bounce
Posted by matt on 10th of Feb 2011 at 04:25 am
Actually, you need to understand EW. Those trades worked out, here's why
You have to understand EW and I talk about this in the write up: When you have 5 waves down, that move down is either wave A or 1. Wave A would be a bullish pullback, while wave 1 would be the bearish case.
However regardless if it's wave 1 or wave A, you will still get an oversold bounce in wave B or wave 2. Short the oversold bounce. Now under the bullish case the next pullback would be wave C, which would still be winning trade, but obviously not start a major downtrend.
In July 2009 for example, you had an ABC pullback, under my scenario you would have shorted the wave B bounce, you then got another decline in wave C. How did that not produce a winning trade? See my attached picture