Possible Wave Count in USDJPY
I studied under Bill Williams for years and came to have a great deal of respect for his overall mindset on trading and life. Bill believes that the Elliot Wave is the underlying structure of the market. I believe it’s the business cycle which is the underlying structure of the market, and Elliot wave comes as close as any study ever will in defining how markets move through time. Bill very likely is right though, because in my experience, time always proved him to be correct. I once asked Bill if the Elliot Wave implied that market price was pre-determined? He thought for a bit, and replied “no, not really”. He did tell me that for the wave count to be most effective it had to be obvious to the most amount of people. That made intuitive sense to me.
Just as fate is determined by the action of the players on the field, and not by the well thought out and scripted plans of the coaches, I believe market movement is not predetermined either. However if we know how markets move overall, most of the time, there is nothing wrong with taking a step back from trading decisions, and taking out a blank chart and letting your intuition layout an overview of a market’s potential path of least resistance.
Understand though that no matter how extensive your studies, and how much experience you have, that what you come up with is not etched in stone. If the market gives us a signal tomorrow which is in the opposite direction of our overview, we don’t have to initiate a position in that direction, but we would certainly exit our position, and wait for further confirmation, perhaps on a higher time frame.
For me the most important occurence of all, and the one we act on, is a fact based trigger on the time frame we’re trading, regardless of the best laid plans. I’m confident Bill would agree.
Here’s my depiction of the current wave count on the Monthly USDJPY chart.
Jay Norris
www.trading-u.com
jnorris@brewerinvestmentgroup.com
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