I’m looking at GBP/USD since it’s trend reversal back in October.
I’m trying to count the waves correctly and determine if we are currently at 2 or 4.
Using the fib retracement tool as an aid, can anyone weigh in if I should be using it like this, which would put it at wave 4.
Or should I be using it as shown in the second image which would put it at wave 2.
I’ve only been learning this stuff since November. Please pardon the basic nature of my question.
Thanks in advance.
You’re on the right track! Counting waves can be tricky, especially when using Fib retracements to confirm the structure. Based on what you’ve shared, the key thing to check is whether the retracement levels align with typical wave 2 or wave 4 behavior. Wave 2 tends to retrace deeper (often 50-78.6%), while wave 4 is usually shallower (around 23.6-38.2%).
Also, take a look at market structure; wave 4 often moves sideways compared to wave 2, which is usually sharper. If you’re seeing more consolidation, that could be a clue. Keep refining your analysis, and don’t worry about ‘basic’ questions we all started somewhere!
Contrary to popular retail belief, “Elliot Wave Analysis” is just shapes in the clouds. No analysis of historical price by time is able to predict future price by time. If this analysis had an edge, liquidity providers would limit the amount traded at these setups, limiting profitability or not allow them to be traded at all.
The goal is not to get 100% win rate, or be correct all the time. The goal is to make money.
I didn’t dare to say it, being so new here - but I’m really glad you did. Thank you! 
