$USDJPY Elliott Wave Analysis

Monday, December 16, 2013 Posted by TFAL Team

Elliott Wave analysis works in all timeframes.it becomes easier to spot the waves when using larger time frames.
today my focus shall be on the weekly chart. In the USDJPY weekly chart here, we see that wave 5 is currently in progress.

Here are some simple guidelines to trading Elliott Waves successfully.
These guidelines works equally well in bullish uptrend waves and bearish downtrend waves.
For the purpose of this exercise, since we are talking about USDJPY,
our reference is the bullish uptrend wave.

1. Elliott waves come in 5 waves. 3 bullish uptrend waves, plus 2 bearish (or corrective) downtrend waves.
2. Wave 1, wave 3 and wave 5 are bullish uptrend waves.
3. Wave 2 and wave 4 are corrective bearish downtrend waves.
4. Wave 3 must not be the shortest wave.
5. Bottom of wave 4 should not be lower than the peak of wave 1.
6. For corrective waves 2 and 4, one should be a simple corrective wave and the other a complex corrective wave.
7. Simple corrective wave means a simple ABC wave retracement. (See wave 2 below)
8. Complex corrective waves means something more complicated, including triangle patterns. (See wave 4 below).

Base on the above guidelines, we can conclude that USDJPY in the weekly chart is a valid Elliott Wave. Furthermore, I have calculated the time of each wave. Wave 1 started in 30 Jan 2012. And the current wave, wave 5, shall proceed into the year 2014.