With the EWPT Strategy, we are focusing on Elliott Wave Analysis to determine the opportunities. Once the opportunity is identified the following method is used to enter the trade. Momentum + Pattern + Price.
For each I have specific rules, that in the end need to come together and give me the same signal to be able to take a trade.
Momentum needs to be :
For a buy:
4h Up or Going Up or Overbought
1h Up or Going Up or Overbought
15min Up or Going Up
For a sell:
4h Down or Going Down or Oversold
1h Down or Going Down or Oversold
15 min Down or Going Down
Same thing goes for the Longer term where we have Weekly, Daily and 1 hour charts.
What does all of this mean? Well the 4h or weekly chart is the longer chart which dictates the whole move. We always want to trade in the direction of the larger trend. The 1h or Daily chart is the opportunity chart where we look for the pattern and that`s why we want it to be in the same direction with the larger time frame. Finally the 15min or 1h charts are the entry charts. I like to enter on a smaller timeframe so I can get a better entry with a smaller risk and higher reward, and of course it should too move in the direction of the larger trend.
Pattern has to be either an ABC correction or a 5 wave impulsive wave. The pattern has to be done, to end and to have a high probability that it ended we use the Price levels made out of Fibonacci levels.
For ABC the way we measure that the pattern is done is :
previous Impulsive wave : 0.382% + 0.50% + 0.618% + 0.786% retracements
wA projected from wB with : 0.618% + 1.00% + 1.618 % retracement levels.
wB external retracements : 1.618 % + 2.618%
For the 5 wave pattern the price levels are :
w1 projected from w4: 1.00%
w1 – 3 projected from w4: 0.382% + 0.618% + 1.00%
w4 external retracements : 1.272% + 1.618%
First we would search the markets for a pattern on the 1h charts and when we find it, we will draw the price levels to see the end of the pattern. In the mean time we check 4h chart for a confirmation on the momentum position. If all things fall into place we drop down to the 15min chart and wait for our entry, making sure pattern is respected, momentum turns in the right way, and a confirmation for the end with a candlestick pattern. The candle stick pattern I would prefer would be an engulfing pattern that signals the reversal is strong and trend has changed. Now when all this has happened I like to place my entry stop order at 1 bar high/ low from the pattern. I always want the market to lead me into the trade and break support/resistance levels.
Trader’s Mindset: Pro Trader Beliefs
- You don’t need to know what is going to happen next to make money.
- Anything can happen. Once you enter a trade you are no longer in control of where the price will go.
- Every moment is unique. The trade either works or it doesn’t.