This is the last in this 3-part series of articles, in which we have shown how financial markets like the Rand can be likened to the movements of the ocean, with both having different degrees of trend and cycles, moods and patterns.
And the Rand has certainly been putting on a fine display in showing us this working in no uncertain way.
In our last 2 articles, we covered firstly the primary trend, which can be likened to the ocean TIDES (see post here).
And then the secondary trends which can be likened to the WAVES which are lesser (more frequent) trends within the primary trend (the tide - see post here).
To recap what we discussed in these (please read them first if you haven't - very important!), to be successful in the foreign exchange market:
- You need to know what the primary trend is, and how far that trend is likely to continue, so you can use this to your advantage.
Fighting the tide is a recipe for disaster! - You also need to know understand the intermediate trend – what mood the market is in, and have some system to know whether it can be expected to be trending nicely, or be choppy, or even flat. Or reverse trend.
Taking a decent wave is dependent on being ready beforehand!
As mentioned last week, like a surfer, we need to catch the wave early and ride it until it has lost its power. And then look for the next.
But what is the crux in taking a successful wave?
Positioning..... Timing..... And then Action!
And this is where the Minor Trend comes in, which can be likened to the RIPPLES on the waves.
Catching a successful wave is dependent on being in the right position, then waiting for the ripples on the wave to tell you the wave is at its optimum position to take a ride. And too when the wave has lost most of its power.
How often have you seen what looks like a perfect wave building up, and yet surfers have missed this wave because:
- ...they weren’t in the right position when the ripples on the wave were close to peaking.
- ...or they started paddling too late or too early – and come off second best!
- ...or they didn’t paddle at all, or they started, then pulled out at the last minute...
And when it comes to the Rand –
...how often have you seen the market move, but you were not in a position beforehand to take advantage?
...or you were in the right position, but took action too early, or too late?
...or you in a position to take advantage of a move, and then pulled out at the last minute, or did nothing at all?
Sound familiar? If we have been involved with forex exposures for any time, we have all been there.
Such is surfing – and such is the Rand, and every other financial market.
You need to know the market in three different degrees (long, medium and short term) to be really successful.
Click to see full size...And while they are merely a small trend superimposed on two larger degree trends, the minor (short term) trends are a critical factor in determining whether you have a successful ride or not, and when to enter and exit the market.
But then what is probably as critical, is that we do NOT let our emotions take control at the last moment, but that we use a an objective proven system that removes emotion from the decision-making process.
And then simply TAKE ACTION – even when our fears are screaming for us to pull out.
The result – an exhilarating ride!
Did you enjoy this further analogy? Make sense? Useful? What are your thoughts and comments? I would love to hear them.
To your success~
James Paynter
P.S. Did this 3-part series resonate with you? Perhaps make you realize what has maybe been missing up to now? But still feeling unsure?
If so (and this is for new clients only), I would like to offer you the opportunity to try out our forecast service at a special rate for the next short while – risk free. This will give the headsup as to where the Rand is expected to head – in 4 timeframes – the next few years, months, weeks and days. The short term forecasts are updated twice weekly and the others as the unfolding patterns require it.
For more details, take a look here .
6 replies to "Respect the Tide, Ride the Wave, Watch the Ripples - Part 3"
GBPZAR now broken out of its 1 year channel. How much Rand weakness could we see in the short term elliott wave analysis.
Doug, we were expecting a move up into the 18.40-18.90 area before topping out which has happened. The 18.8065 area needed to be successfully broken above to signal more near term Pound strength, but we have seen a sharp drop back into the channel again, so expect some more short term Rand strength.
Thanks James for this post. As always it all makes clear sense when put across as you do. Regards Clive
Thanks, Clive - much appreciated. Love to share what has helped me, so others can benefit.
It seems ZARAUD is on a strengthening trend at the moment. Can you say how far this might go in the very near short term?
Hi Geoff,
I haven't looked at the AUDZAR recently (we only cover the 3 majors vs the Rand as part of our standard service), but we can do this on a fee basis as a special once-off full analysis for you.
Let me know.
Thanks
James