A large flat correction wave appears to be complete and the beginnings of the next bullish impulse wave is underway. The correction wave in this Elliot wave set up would be the 2 wave. The strategy is to wait for the correction to retrace at least 38% but preferably 61.8% of the previous impulsive wave. Buying by laddering into the position is the most aggressive strategy. Buying partial orders at 50% retracement 61.8% and then again at 78% provides is a good way to get into the trade before it breaks out. The more conservative entry is to wait for confirmation.
To confirm entry, I try to stack as many confirmations as possible.
1 Look for a break of Head and shoulders trendlines(as noted in the chart)
2 Look for RSI to have higher highs and higher lows
3 look for volume increasing in not just one bar but ideally three bars(no volume probably indicates false breakout)
4 look for long green bar to break and close above the 55 EMA
5 place stop at the apparent bottom to allow for bull bear struggles.
These strategies are not perfect, but will keep you out of many false starts and provide very good risk to reward ratios.
To confirm entry, I try to stack as many confirmations as possible.
1 Look for a break of Head and shoulders trendlines(as noted in the chart)
2 Look for RSI to have higher highs and higher lows
3 look for volume increasing in not just one bar but ideally three bars(no volume probably indicates false breakout)
4 look for long green bar to break and close above the 55 EMA
5 place stop at the apparent bottom to allow for bull bear struggles.
These strategies are not perfect, but will keep you out of many false starts and provide very good risk to reward ratios.