Market Analysis: Basics That You

Need to Master
 DISCLAIMER
Risiko Pelaburan
• Dagangan online secara margin mempunyai risiko tinggi. Tahap leverage
tinggi boleh membantu atau menyebabkan kerugian.
• Sila pertimbangkan sama ada berdagang online sesuai untuk anda
dengan mengambil kira pengalaman, objektif pelaburan dan kemampuan
kewangan.
• Ada kemungkinan anda boleh hilang sebahagian atau keseluruhan
pelaburan asal. Oleh itu, jangan gunakan modal daripada wang yang anda
tidak sanggup rugi. Anda seharusnya mengetahui risiko berkaitan
dagangan online, dan mendapatkan pandangan daripada penasihat
kewangan bebas sekiranya anda mempunyai sebarang kemusykilan.
ZULKIFLI ABDUL RAZAK

FULL TIME INVESTOR

MORE THAN 20 YEARS

EXPERIENCE IN RETAIL
TRADING

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MARKET STRUCTURE

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WAVE THEORY

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1

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 ELLIOT WAVE THEORY
• DEVELOPED BY RALPH NELSON ELLIOTT
(1871-1948)

• “WAVE PRINCIPLE”: REPETITIVE “WAVES” IN

THE MARKET AS A RESULT OF PARTICIPANTS’
PSYCHOLOGY

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 Duration Preferred
Wave Degree Motive Corrective
Minimum Maximum Time Frame

Grand Super Cycle ((I)) ((II)) ((III)) ((IV)) ((V)) ((a)) ((b)) ((c)) ((w)) ((x)) ((y)) Decades Centuries Yearly or Less

Super Cycle (I) (II) (III) (IV) (V) (a) (b) (c) (w) (x) (y) Decades Decades Yearly or Less

Cycle I II III IV V abcwxy Years Decades 6M or Less

Primary ((1)) ((2)) ((3)) ((4)) ((5)) ((A)) ((B)) ((C)) ((W)) ((X)) ((Y)) Monthly Years Monthly

Intermediate (1) (2) (3) (4) (5) (A) (B) (C) (W) (X) (Y) Weeks Months Weekly

Minor 12345 ABCWXY Days Weeks Daily

Minute ((i)) ((ii)) ((iii)) ((iv)) ((v)) ((a)) ((b)) ((c)) ((w)) ((x)) ((z)) Hours Days Hourly

Minutte (i) (ii) (iii) (iv) (v) (a) (b) (c) (w) (x) (y) Minutes Hours Minutes

Subminutte i ii iii iv v abcwxy Seconds Minutes Tick

THE NEW ELLIOTT
WAVE

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 ADJUSTMENTS
TRADITIONAL WAVE THEORY
TREND IS IN 5 WAVES & CORRECTIONS IN 3 WAVES
WAVE 3 MUST NOT BE THE SHORTEST
WAVE 4 SHOULD NOT OVERLAP WAVE 1
WAVE 5 OFTEN COMES WITH LESSER VOLUME &
LACKS MOMENTUM
TRIANGLES ARE CONTRACTING IN PRICES
MOSTLY PRICE INVALIDATION LEVELS TO NEGATE
A STRUCTURE
ADJUSTMENTS
TREND CAN BE IN 5 WAVES OR 3 WAVES
SEQUENCES
WAVE 3 (UNLESS A DIAGONAL) SHOULD EXTEND
AT LEAST 1.618 TIMES OF WAVE 1
WAVE 4 SHOULD NOT RETRACE >50% OF WAVE 3
WAVE 5 MUST HAVE MOMENTUM DIVERGENCE
TRIANGLES ARE CONTRACTING IN BOTH PRICES &
MOMENTUM
A DISTRIBUTION SYSTEM TO NEGATE A
STRUCTURE & RUNS AHEAD OF PRICE
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FIBONACCI SEQUENCE

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 FIBONACCI SUMMATION

• 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89 TO INFINITY

• 0 + 1 = 1, 1 + 1 = 2, 1 + 2 = 3, 2 + 3 = 5…
• RATIOS OF THESE NUMBERS SEEN IN
NATURE, ART, GEOMETRY, MUSIC ETC
• IN FINANCIAL MARKET, OFTEN INDICATE
RESISTANCE/SUPPORT

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 EXTENSIONS RETRACEMENT

• 61.8% (0.618) • 14.6% (0.146)

• 100% (1.00) • 23.6% (0.236)
• 123.6% (1.236) • 38.2% (0.382)
• 161.8% (1.618) • 61.8% (0.618)
• 200% (2.00) • 76.4% (0.764)
• 261.8% (2.618) • 85.4% (0.854)
• 323.6% (3.236)
• 423.6% (4.236)
• 681% (6.81)
MOTIVE SEQUENCE

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 IMPULSE

IMPULSE
MOTIVE
WITH
SEQUENCE
EXTENSION
LEADING
DIAGONAL
ENDING
IMPULSE WAVE
5 WAVE PATTERN (MOTIVE SEQUENCE)

- NUMBERED PHASE

- WAVE 1, 3 & 5 MARKET DIRECTION

- WAVE 2 & 4 CORRECTION

- WAVE 2 NEVER MOVES BELOW WAVE 1

- WAVE 3 NEVER THE SHORTEST

- WAVE 4 NEVER ENTERS WAVE 1

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IMPULSE WITH EXTENSION
• EXTENSION (ELONGATED IMPULSE)
PRESENTS IN MOST IMPULSE WAVE

• EITHER 1 OF 3 ACTIONARY SUB WAVE (EITHER

WAVE 1, WAVE 3 OR WAVE 5)

• PROVIDES GUIDE TO EXPECTED LENGTH OF

UPCOMING WAVES (9, 13, 17, 21 ETC)

• IN STOCK MARKET & CURRENCY MARKET,

EXTENSIONS NORMALLY OCCUR IN WAVE 3

• IN COMMODITY MARKET, EXTENSIONS

NORMALLY OCCUR IN WAVE 5

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 IMPULSIVE SEQUENCE

FIBONACCI RATIO OSCILLATOR

WAVE 2
TYPICALLY 50%, 61.8%, 76.4% CHANNEL BREAK
OR 85.4% OF WAVE 1

WAVE 3
TYPICALLY 161.8% OF WAVE 1- HIGHEST MOMENTUM IN
1 OR MORE CURRENT CYCLE
(200%, 261.8%, 323.6%)
WAVE 4
TYPICALLY 14.6%, 23.6% OR
CHANNEL BREAK
38.2% OF WAVE 3 BUT NO
MORE THAN 50%
WAVE 5
EITHER:
1. SAME AS WAVE 1
MOMENTUM DIVERGENCE
2. 61.8% OF WAVE 1-3
3. 123.6%-161.8% OF WAVE 4

NOTE:
1. RUNS IN 5-9-13-167-21-25 SWINGS SEQUENCE
2. A NEST (EXTENSION, 1-2, i-ii) MUST SHOW MOMENTUM
OSCILLATION
3. LOOK FOR 3 CHANNELS IN OSCILLATOR

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 LEADING DIAGONAL
FIBONACCI RATIO
LEADING DIAGONAL

5-3-5-3-5 OR 3-3-3-3-3 STRUCTURE

EITHER WAVE 1 OF AN IMPULSE OR WAVE A OF ZIGZAG

CHARACTERIZED BY OVERLAPPING WAVE 1 & 4 AND

THE WEDGE SHAPE

OSCILLATOR

WAVE 5 MUST HAVE MOMENTUM DIVERGENCE

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 ENDING DIAGONAL
FIBONACCI RATIO
ENDING DIAGONAL

5-3-5-3-5 OR 3-3-3-3-3 STRUCTURE

EITHER WAVE 5 OF AN IMPULSE OR WAVE C OF ZIGZAG

CHARACTERIZED BY OVERLAPPING WAVE 1 & 4 AND

THE WEDGE SHAPE

USUALLY AT THE END OF A LARGER PATTERN

OSCILLATOR

WAVE 5 MUST HAVE MOMENTUM DIVERGENCE

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CORRECTIVE SEQUENCE

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CORRECTIVE SEQUENCE
• SUBDIVIDE INTO 3 WAVES

• ALWAYS DENOTED BY LETTERS

• CORRECT THE MOTIVE WAVE

• 4 TYPES: ZIGZAG, FLAT, TRIANGLE

& COMBINATION

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 CORRECTIVE SEQUENCE
FIBONACCI RATIO
ZIGZAG

5-3-5 STRUCTURE

WAVE B TYPICALLY 50%, 61.8%, 76.4, 85.4% OF WAVE A

WAVE C TYPICALLY 61.8%, 100% OR 123.6% OF WAVE A

IF WAVE C EXCEEDS 161.8%, IT CAN BECOME WAVE 3

OF AN INCOMPLETE IMPULSE

OSCILLATOR
WAVE A & WAVE C MUST HAVE MOMENTUM
DIVERGENCE

WAVE C MUST ERASE DIVERGENCE IN RESPECT OF

WAVE A

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 CORRECTIVE SEQUENCE

FIBONACCI RATIO
FLAT

3-3-5 STRUCTURE

3 TYPES: REGULAR, EXPANDED & RUNNING

WAVE B TYPICALLY 90% OR MORE OF WAVE A (IF MORE

THAN 161.8%, IT IS NOT A FLAT)

WAVE C TYPICALLY 61.8%,100%, 123.6%, 161.8% OR MORE

OF WAVE A-B

OSCILLATOR
WAVE B MUST HAVE MOMENTUM DIVERGENCE WITH
START OF WAVE A

WAVE C NEEDS TO HAVE MOMENTUM DIVERGENCE

WITHIN ITSELF

WAVE C NEEDS TO ERASE MOMENTUM DIVERGENCE OF

WAVE A

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 CORRECTIVE SEQUENCE
FIBONACCI RATIO
TRIANGLE

USUALLY OCCURS IN WAVE B OR WAVE 4

3-3-3-3-3 STRUCTURE

SUBDIVISION OF ABCDE CAN BE ABC, WXY

OR FLAT
OSCILLATOR

OSCILLATOR MUST SUPPORT TRIANGLE

PATTERN IN EVERY TIME FRAMER

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 CORRECTIVE SEQUENCE
FIBONACCI RATIO
DOUBLE CORRECTION

SIDEWAYS COMBO OF 2 CORRECTIVE PATTERNS, LABELLED

AS WXY IN A 7, 11, 15, 19 OR 23 SWING STRUCTURES

WAVE X IS TYPICALLY 50%, 61.8%, 76.4% OR 85.4% OF WAVE

W

WAVE Y: 61.8%, 100% OR 123.6% OF WAVE W

WAVE Y CANNOT PASS 161.8% OF WAVE W

OSCILLATOR
WAVE ((w)) OF Y SHOULD HAVE MOMENTUM DIVERGENCE

IF NO DIVERGENCE ((w)) OF Y & W, TRUNCATION COULD

HAPPEN

CHANNEL LINE CROSS AT WAVE X SIGNALS TRUNCATION

NO MOMENTUM DIVERGENCE IN WAVE Y RELATING TO WAVE

W

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 COMBINATION OF FLAT & ZIGZAG

COMBINATION OF FLAT & TRIANGLE

COMBINATION OF 2 DOUBLE
THREES OF LESSER DEGREE
 CORRECTIVE SEQUENCE
FIBONACCI RATIO
TRIPLE CORRECTION

SIDEWAYS COMBO OF 3 CORRECTIVE PATTERNS, LABELLED

AS WXY IN A 7, 11, 15, 19 OR 23 SWING STRUCTURES

WAVE X IS TYPICALLY 50%, 61.8%, 76.4% OR 85.4% OF WAVE

W

WAVE Y: 61.8%, 100% OR 123.6% OF WAVE W

WAVE Y CANNOT PASS 161.8% OF WAVE W

OSCILLATOR

WAVE Z SHOULD NOT END WITH ANY MOMENTUM

DIVERGENCE IN RELATION TO WAVE Y

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COMBINATION OF FLAT, DOUBLE
THREE & ZIGZAG

COMBINATION OF THREE DOUBLE

THREES
IMPULSIVE SEQUENCE CORRECTIVE SEQUENCE
IMPULSIVE ZIGZAG DOUBLE CORRECTION

LEADING DIAGONAL FLAT

TRIPLE CORRECTION

ENDING DIAGONAL TRIANGLE

MARKET DYNAMIC

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 FACTORS THAT MOVE MARKET
ECONOMY BUSINESS FINANCIAL MARKET

• SUPPLY & DEMAND • POLICY • STRUCTURE &

• PRICE • CONSUMER’S MOMENTUM
• QUANTITY SENTIMENT CORRELATION OF
• MANAGEMENT DIFFERENT ASSET
CLASSES
 FIXED

MARKET
USD YEN
DYNAMIC

INDICES
INDICES
• REPRESENTS INVESTMENT INSTRUMENTS, ASSETS
• SUBDIVISION: SECTOR ETF, INDIVIDUAL STOCK

UNITED STATES DOLLAR

• REPRESENTS PRICE, VALUE

JAPANESE YEN
• REPRESENTS COST & SENTIMENT
YIELD RISK LIQUIDITY VALUATION

OPTIMUM ENVIRONMENT

DUE FOR CORRECTION

DUE FOR CORRECTION

NO DEMAND, EXCESS
SUPPLY

WORST CASE SCENARIO

NO DEMAND
 CURRENCY MARKET FLOW

USD JPY EURO GBP CHF AUD CAD NZD

• CAPITAL • FUNDING • THE RUNNER • THE HOME • SAFE HAVEN • COMMODITY • COMMODITY • COMMODITY
MARKET • RISK UP • SPECULATION • CHINA • GAUGE USD’S
• COST STRENGTH

C V

O FEAR A

S GREED L
U
T E
 RISK LIQUIDITY

YIELD

8.00 AM 3.15-3.45 PM 4.00 PM 7.20-7.40 PM 900-930 PM 9.30 PM 945-1015 PM 1.00 AM

• TOKYO • NEW
• NEW • DAILY
MONEY • PRE • LONDON • PRE NEW YORK • MONEY
SESSION YORK SPOT
LONDON OPEN YORK MONEY EXITS
OPEN TRADE
FLOW

Daily Balancing (11am-2pm) Daily Balancing (10pm-100am)

 DOLLAR COMMODITY
INDEXES YEN GROUP COMMODITIES
GROUP DOLLAR
• DXY • AUDUSD • S&P500 • USDJPY • GOLD
• EURUSD • NZDUSD • DJIA • EURJPY • SILVER
• GBPUSD • USDCAD • DAX • GBPJPY • COPPER
• USDCAD • FTSE • AUDJPY • CRUDE OIL
• USDNOK • NASDAQ • CADJPY • NATURAL
• USDJPY • RUSSELL • NZDJPY GAS
• USDCHF • EU50 • CHFJPY • SOYBEAN
• USDSEK • NIKKEI • US 10Y • CORN
• USDPLN • HANG SENG FUTURES • SUGAR
• WHEAT
• COFFEE
 MARKET
DYNAMICS

INDICES
FIXED DYNAMIC YEN DYNAMIC USDX DYNAMIC
DYNAMIC

INDICES YEN STRENGTH POSITIVE USDX NEGATIVE USDX

HIGHER INDICES
STRENGTH XXXJPY LOWER DYNAMIC DYNAMIC

USDX
XXXJPY HIGHER XXXJPY HIGHER INDICES LOWER USDX STRENGTH
WEAKNESS

XXXUSD HIGHER XXXUSD LOWER XXXUSD HIGHER

USDX SIDEWAY USDJPY LOWER
USDXXX LOWER USDXXX HIGHER USDXXX LOWER

USDJPY USDJPY
DOLLAR PAIRS
USDX LOWER USDX SIDEWAY SIDEWAY TO SIDEWAY TO
SIDEWAY
HIGHER LOWER

USDJPY
SIDEWAY TO XXXJPY LOWER XXXJPY HIGHER
HIGHER

INDICES INDICES
SIDEWAY SIDEWAY
 WEAK US WEAK
WEAK INDICES
DOLLAR JAPANESE YEN
• NEGATIVE US • FIXED • YEN
DOLLAR DYNAMIC DYNAMIC
DYNAMIC • INDICES
• FIXED DYNAMIC
DYNAMIC
INSTRUMENT SELECTION
PROCESS

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 MARKET DYNAMICS ANALYSIS
INTERMARKET • CORRELATION BETWEEN INTRUMENT
WITHIN THE SAME CATEGORY (INDICES,
ANALYSIS PAIRS)

SEQUENCES • FORMATION OF INCOMPLETE PRICE

ANALYSIS STRUCTURE

• MAPPING USING RULES DEFINED BY

WAVE THEORY WAVE THEORY

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 MARKET DYNAMIC IDENTIFICATION

CURRENT DYNAMIC FUTURE DYNAMIC

RELATIONSHIP BETWEEN CROSSES

IDENTIFYING INCOMPLETE SEQUENCES

CURRENT & FUTURE WAVE STRUCTURES

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3-7-11 TECHNIQUE

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 Corrective Structure

5 • Occurs only when price breaks

Ending with Momentum Divergence the trend line that connects
3 Wave 2 & Wave 4

Breaking previous structure high • 3 basic corrective structure:

1. ZigZag
2. Flat
3. Triangle

4 • 2 extended corrective
structure:
1. Double Correction
2. Triple Correction
1
• Setup exists only when:
5-wave Impulse Structure
1. 5-wave structure breaks previous
structure high/low
2. 5-wave structure ends with
momentum divergence
2 3. Correction breaks trend line with
clear connector
INVEST IN A SYSTEM,
TRADE YOUR SYSTEM

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Q&A SESSION

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