{"id":33805,"date":"2012-11-28T18:51:04","date_gmt":"2012-11-28T23:51:04","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/?p=33805"},"modified":"2012-12-31T17:37:34","modified_gmt":"2012-12-31T22:37:34","slug":"usdjpy-lemons-into-lemonade","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2012\/11\/28\/usdjpy-lemons-into-lemonade\/","title":{"rendered":"USD\/JPY: Lemons into Lemonade"},"content":{"rendered":"

How Elliott wave analysis helps you as a forex trader with built-in, risk-defining safeguards <\/span>
\n November 28, 2012 <\/span><\/h3>\n

By Elliott Wave International<\/span><\/h3>\n

Elliott wave analysis is not a crystal ball. (No market-forecasting method is.)<\/p>\n

But here’s what is remarkable: Even when your Elliott wave forecast doesn’t pan out, you have built-in safeguards to alert you — and help you manage risk. Here’s a real-life example.<\/p>\n

Going into the November 14 low, USD\/JPY charts had been showing an impulsive downward Elliott wave pattern. Impulses are 5-wave moves, but on November 13-14, the pattern looked incomplete: the fifth wave down seemed to be missing.<\/p>\n

Here’s a chart our Currency Specialty Service<\/em> subscribers saw early on November 13:<\/p>\n

\"\"<\/p>\n

So, our analysis on November 13 suggested that USD\/JPY would fall further. But USD\/JPY just would not fall; instead, it went sideways.<\/p>\n

That suggested to our Currency Specialty Service<\/em> team that the wave (4) you see in the chart above was extending. Perhaps it was developing as another Elliott wave pattern — maybe a contracting triangle? This chart and analysis described to subscribers that scenario:<\/p>\n

\"\"<\/p>\n

“A bearish fourth-wave triangle is another idea that’s in a position to yield new lows in wave (5). Resistance rests at 79.655\/765.”<\/p>\n

Note that line: “Resistance rests at 79.655\/765”<\/strong> — it represents the very risk-defining safeguards I mentioned earlier.<\/p>\n

How? Well, there are things that Elliott wave patterns just are not allowed to do. In a contracting triangle (an A-B-C-D-E formation), prices must stay within converging trendlines — and they cannot overlap the start of wave A, the origin of the pattern. Resistance at 79.655\/765 was exactly that: the price point where the contracting triangle interpretation would be invalidated.<\/p>\n

Practical application:<\/strong> If you were bearish on USD\/JPY on November 14, you could have used the price area of 79.655\/765 to manage your position risk.<\/p>\n

As you probably know, USD\/JPY did not go sideways for long. Nor did it go down. Soon after, it went higher and breached that key resistance level:<\/p>\n

\"\"<\/p>\n

When one Elliott wave pattern ends, another one begins. As soon as that key resistance in USD\/JPY was breached, a new road map for the Japanese yen became clear.<\/p>\n

 <\/p>\n\n\n\n
\"\"<\/a><\/td>\nDownload Your Free 14-page eBook: “Trading Forex: How the Elliott Wave Principle Can Boost Your Forex Success”<\/strong>Here’s some of what you’ll learn:<\/p>\n
    \n
  1. Which Elliott waves to trade<\/li>\n
  2. Which Elliott waves set up your forex trade<\/li>\n
  3. When your analysis is wrong<\/li>\n
  4. Guidelines for projecting price targets<\/li>\n
  5. How to evaluate an Elliott wave structure<\/li>\n
  6. How to use the bigger picture to give you perspective on the market’s next major move<\/li>\n<\/ol>\n

    Jim also takes you through two real-world trading examples to reinforce what you’ve learned and apply it to your own trading.<\/p>\n

    All you need is a free Club EWI profile to download this FREE 14-page eBook now >><\/strong><\/a><\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

    \n

    This article was syndicated by Elliott Wave International and was originally published under the headline USD\/JPY: Lemons into Lemonade<\/strong><\/a>. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.<\/em><\/p>\n

     <\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

    How Elliott wave analysis helps you as a forex trader with built-in, risk-defining safeguards November 28, 2012 By Elliott Wave International Elliott wave analysis is not a crystal ball. (No market-forecasting method is.) But here’s what is remarkable: Even when your Elliott wave forecast doesn’t pan out, you have built-in safeguards to alert you — … <\/p>\n

    Continue reading “USD\/JPY: Lemons into Lemonade”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-33805","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/33805","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/comments?post=33805"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/33805\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/media?parent=33805"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/categories?post=33805"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/tags?post=33805"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}