Murfski Profile picture
18 Oct, 10 tweets, 3 min read

For a while now I've been meaning to do a thread on one of my favorite setups

It occurs across all timeframes and is easy to spot

So enough said, lets have a look what I'm talking about

So within the chart we see a clear uptrend on Ethereum, comprising Higher Lows and Higher Highs

At the beginning of September 2020 an impulsive sell off commences, which in turn violates the previous Lower High

This is referred to as a Market Structure Break

2/10 Image
Now the theory here is that, following a Market Structure Break, price usually returns o the area at which the break occurred

Our interest is in the last group of down candles which preceded the local high. Specifically, the range spanning from the open to the close

3/10 Image
Next we must draw our range using the Fibonacci tool to determine the Equilibrium (EQ), i.e. the halfway point

The data points we're using are the open and close of the same group of candles

Open = Range High
Close = Range Low
EQ = Dotted Line

4/10 Image
If our thesis is correct, we can expect price to return to our range before continuation down

The entry and exits can be determined by your own tolerance to risk, however, for this example we're looking to enter a short below the EQ, with our stop loss above the close

As we can see, price rallies back into our range

Set your short order just below the EQ and your stop loss above the range high

The target for our trade is the previous low

6/10 Image
Something to watch out for with this trade

If we see price consolidate just below the EQ, it is usually a bad sign and will lead to the highs of the range being swept

Look to either reduce risk or exit your position if you see signs of this happening

7/10 Image
And boom, we see price head back towards the previous low

Now I recommend taking profits as the trade progresses so that you can manage your risk correctly, however, that's outside the scope of this thread

Trade completed!

8/10 Image
So in summary:

- Wait for a Market Structure Break to occur

- Draw out a range based on the cluster of down/up candles before the last high/low

- Wait for price to return to your range

- Enter your position utilizing the data points mentioned

- Target the old high/low

I hope this thread was helpful to you

If there are any further questions, my DM's are open

Enjoy your Sunday people!


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More from @Murfski_

16 Apr 19
A mini lesson on symmetrical triangles from an Elliott Wave perspective.

The first pic is the typical symmetrical triangle where price corrects in a contracting fashion and then continues up.
However a more complex variation exists where the symmetrical triangle APPEARS to break down, before proceeding up in continuation

This is due to the B wave (black) becoming complex, in that it subdivides into another ABC (blue), with the B of this division being a triangle.
It's of the utmost importance you are checking your counts on lowish timeframes to ensure that you aren't getting this mixed up

Having a symmetrical triangle break the wrong way can really throw off an otherwise good count if you aren't able to see where it is you went wrong
Read 5 tweets
26 Jan 19

Elliott Wave Principle by A.J Frost & Robert Prechter

Thread 2 of many - Impulsive Waves

This thread goes into detail about impulsive waves and the most basic rules/guidelines required for technical analysis

I need 35 Retweets before I consider thread 3!!
Before proceeding to the thread, if you are a beginner I recommend you review the content of Episode 1, the link for which is copied below.

Ok. You've been warned... Thread commencing 👇👇
1 - Up or down

So in the first thread, I used the typical 12345ABC to show you guys the archetypal cycle which is depicted throughout most of the literature

However, cycles occur in bear and bull markets, and as such, can either trend up or down.

Further explanation enclosed
Read 12 tweets
19 Jan 19

Elliott Wave Principle by A.J Frost & Robert Prechter

Regarded as the most comprehensive resource for the learning of Elliott Wave Theory.

Thread 1 of many - Understanding the basics 👇👇

Before I consider publishing Thread 2, I require 25 Retweets!
1 - The Concept

Ralph Nelson Elliott discovered that social or crowd behavior trends and reverses in recognizable patterns.

The two main human emotions that govern these trends are fear and greed, which are reflected in either impulsive or corrective wave patterns.
2 - The basic pattern

An impulsive wave comprises 5 numbered waves:

- 1, 3 & 5 effect the directional movement of the larger trend and are the most powerful
- 2 & 4 are countertrend "interruptions" and partially correct the larger trend

Note - an impulsive wave makes progress
Read 9 tweets

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