Have you seen the chart on EOS? That is the question I get from Andrew on the phone. I am not one to get excited about charts, but I have to say from a technical perspective, it is by far the best looking alt coin chart out there. The reason is it exhibits a crystal clear structure that points to a greater chance of higher prices ahead. As a technical trader, this is what you want your chart to look like BEFORE you enter or even buy more.

Clear Wave Count Highlights Potential.
Wave 4 In Place Means Wave 5 Likely.

Going back to December of 2018, EOS, just like Bitcoin established its lowest low at the 1.53 area. There is NO way you can tell from a chart at that point in time that the 1.53 area was going to be the current bottom.

You had to wait until mid January before it was clear the the low was in place. That is because price action developed a consolidation. This took WEEKS and did not follow Bitcoin as dramatically as it began its broader move higher.

This consolidation phase is typical of a Wave 2 in Elliott Wave terms, where the bottom of the wave does not go below the low of the initial wave. Also known as a higher low.

And higher lows often lead to? Higher highs. This could not get any clearer. Even if you chose to wait for the more obvious resistance breakout at the 2.90 area, the reward/risk was favorable since the next resistance was the 4.50 area.

Now that price has tested that level, it has established a clear 4 wave impulse which means the likelihood of a 5th wave higher is greater. Just remember that Wave 4’s can be tricky. Corrective waves often unfold in 3 legs, and presently, the second leg higher (B), also known as a fake out may be forming.

New member? Have you seen our recent trade review webinar about Bitcoin? Watch it here.

This is where having a plan and a trade process comes into play. You don’t just jump in because price likely in a Wave 4 pull back. The overall structure is favorable, so now it’s about WAITING for a high probability location AND price setup. WAITING for these variables to line up increases probability of getting into a trade that will show a positive return. It may sound like common sense, but you may be surprised how many people would rather jump in, HOPING it goes their way.

Even less helpful is getting caught up in the fundamentals. A chart is a chart. When it comes to short term trades especially, the chart looks the way it does because the order flow is what moves the price. And order flow is often generated by the crowd’s “perception” of the future value. It doesn’t matter if it is rational or not. If you buy it at 3 and it goes to 6, you have a profit.

Overall, IF EOS can retrace closer to the 3 area support, and present a reversal, that would provide the type of reward/risk we are looking for. With Bitcoin and Litecoin leading the way, and the previous 4 waves in place, EOS is poised to test the low 4’s or even the 5 area in the coming weeks.  We have our plan and process that we share with our members. What is your plan?

Questions and comments welcome.

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