RE: The Effectiveness of "Pivot Trendlines", Using Bitcoin's Current Price Data
Hi Jaemsbrown (a great singer by the way!)
I agree with most of your support lines. For me, on a downtrend, I also use horizontal support lines. All dotted lines are my addition. I see three primary supports and for me these are more prominent than the slanted support lines. This because the slant support lines miss much of the horizontal support regions or only briefly touch them. I've also drawn my Elliot Wave projections of a probable abc correction using these horizontal supports. The first possible stop for c is at around $3,175 as marked with (c?) and the second is $2,000 or so as marked with (c??). There could be a panic overshoot below the lowest dotted black support, but a brief one. I see this scenario as my probable and so primary count.
If there is a b wave bounce at the first dotted black support, this could result in a potential Head and Shoulders Top pattern as noted by LS (Left Shoulder) and Head (H) and Right Shoulder (RS) peaks. Note that your top most red line support would make a fine looking Neck Line to this H&S Top pattern.
On a longer term, here is the Elliot Wave count I use as base guide. We have either completed or close to completing Wave III and so a Wave IV sizable correction is due as shown in chart below. My abc correction is an attempt at defining the pathway for Wave IV. Once this is in, the Wave V to perhaps $7,000 or higher.
Thanks for that detailed analysis, @haejin.
I'm on the look-out for heads and shoulders, too. I've never been an elliot wave guy, as I think there's too much subjectivity involved, but I've known a few traders in the past that have had decent success with it as part of their trading tools, so I see enough value in it to not reject it out of hand.
Every winner for past 10 years of the global trading championship has been an EW practitioner, respectively.
I never heard of that event, but, wow, yeah that probably isn't a coincidence.
In my own experience with EW traders, they're constantly adjusting wave counts in hind-sight to make the data "fit". I see that and I think to myself "how many bad trades happened based on the previous wrong count?"
But, I admit, I've never given it much chance to work for me, even though I do understand the basic rules and try to get in where I calculate a third impulse wave to be starting (so I guess you could say that I use it?). Maybe I should have taken it more seriously.
I know exactly what you mean. EW is an art and just like any art, it depends on the artist. I don't rely on the micro counts or complex corrections. I basically look for the abc corrections and once c is close to a bottom, I ladder in my entry in other words scale in or spread my buys. After abc correction is always a reversal and play that for the impulse five wave up. I did this with Bitcoin's July bottom to recently and sold at >70% profit. Not too shabby.
I hear ya and I agree on the artist comment. That's true of all TA, really.
This ABC correction strategy certainly makes sense. Basically a relatively high probability reversal, "counter-trend" trade or "trend-continuation" after correction, however you prefer to look at it.
I can definitely see your method complementing my own style very nicely, especially since I'm pretty sure that I already intuitively read the market similarly to your EW method, probably from having so much experience with reading charts and noticing patterns.