2018issue C1016-23
V-Trade reversal, retrace, and continuation rules
A completed Elliott wave analysis count stays a hypothesis until a Renko chart brick reversal, a Fibonacci retracement or volatility-band target, and SRSI divergence or convergence all fire on the same swing.
- V-Trade rules split into downtrend-to-uptrend and uptrend-to-downtrend families, then apply to the reversal, the retrace in the new move, and the continuation after that retrace.
- A downtrend-to-uptrend reversal is framed as the end of impulse wave 5 or correction wave C, with a new wave 1 or A expected after a double upward Renko brick plus band, SRSI, target, and wick checks.
- Hidden positive divergence treats the last downswing as a correction that can resume the prior uptrend. Negative divergence after a five-impulse up wave is used to confirm an up-to-down reversal.
- Editorial reading: the wave count becomes a trade setup only when the Renko reversal, the Fibonacci or volatility-band target, and SRSI agreement fire on the same swing.
A wave count stays a hypothesis
The archive presents V-Trade as two families of rules, one for a downtrend that turns up and one for an uptrend that turns down. Each family is then applied to the reversal, to the retracement during the new move, and to the continuation after that retrace.
Editorial interpretation: treat a completed Elliott wave analysis count as a hypothesis. It becomes a trade setup only when a Renko chart brick reversal, a Fibonacci retracement or volatility-band target, and SRSI divergence or convergence all fire on the same swing.
Downtrend-to-uptrend reversal
A downtrend-to-uptrend reversal is framed as the end of impulse wave 5 or correction wave C, with a new wave 1 or A expected after a double upward Renko brick.
Confirmation also requires price near the volatility-band bottom, a completed last down wave, SRSI near the bottom with positive price divergence, support at passive or active down targets, and a wick below a double-sized reversing Renko brick.
Uptrend retrace and continuation
An uptrend retrace is treated as wave 2, 4, or B after wave 1, 3, or A has reached a target, with price at passive or active resistance or the volatility-band top and SRSI near the upper side showing hidden divergence or a convergent move.
Uptrend continuation after wave 2 or 4 (impulse 3 or 5) or after wave B (correction C) is checked when price is near passive or active support or the volatility-channel bottom and SRSI shows a convergent move or hidden divergence.
Uptrend-to-downtrend reversal
An uptrend-to-downtrend reversal expects wave 1 or A after a double downward Renko brick, with price near the volatility-band top, a completed last up impulse or correction, SRSI near the top with negative price divergence, resistance at passive or active up targets, and a wick above a double-sized reversing Renko brick.
Divergence on the same swing
A positive hidden divergence, where price makes a higher low while SRSI makes a lower bottom, is used as a signal that the last downswing was a correction and that the prior uptrend can resume after that correction.
A negative divergence, where price makes a new higher top while SRSI makes a lower top, is used to confirm an up-to-down reversal. The archive treats the most useful cases as those that appear after a five-impulse up wave.
Archive examples of a completed short setup
On a 15-minute impulse example, an uptrend-to-downtrend short setup is treated as complete when price is near the volatility-band top, the last up move is a finished impulse, SRSI is near the top, a 423.6% Fibonacci projection of the last small down move is reached, and a wick forms above the reversing candle.
On a modified Renko example after an upward ABC correction, the same reversal family is applied when a double downward brick appears at the volatility-band top, SRSI shows negative divergence between mid-wave C and the current wave-C top, price meets a 50% retracement of the prior downward impulse plus 200-bar average and prior-wave resistance, and a wick forms above the double-sized reversing brick.
All readings on this track · 14 readings
- 2007Renko brick construction and breakout rules
- 2014Modified Renko brick size from tick inputs
- 2014Renko brick increment and open construction
- 2014Modified renko construction with RSI bands and a trend filter
- 2014Construction checklist for a brick-chart crossover and same-session breakout
- 2015Optimizing virtual bar size as a trend filter
- 2015Constructing Renko energy bands so support and resistance arrive as pre-marked leans
- 2018Five-rule entries and exits with Elliott waves and Renko bricks
- 2018Modified Renko charts as a filter for fake breakouts
- 2018V-Trade reversal, retrace, and continuation rules
- 2018A finished impulse, a Fibonacci target, and a reversing Renko brick as one test
- 2019Brick sampling changes what a volatility envelope can show
- 2019A consecutive Renko brick count as a mechanical entry-exit procedure
- 2019Renko brick scale as a falsifiable trend hypothesis