Elliott waves- “Why the waves break down into set patterns is, of course, a major mystery, we could as well ask why the human being has five fingers”-A Hamilton Bolton. (AN INTRODUCTION TO THE ELLIOTT WAVE PRINCIPAL)
THE ELLIOTT WAVES PRINCIPAL:
Before I start introducing Elliott wave I will assume that all of you are complete beginners or have very latter knowledge on this topic. At the same time I am not going to overvalue you will the technicalities of this principle instant I will teach you the usefulness of this principle in this strategy to you best extant. We look at first of our three leading technical indicators in the form of Elliott waves . Even if all three of this indicator are leading indicators, Elliott wave have ability the forecast trading opportunity in advanced.
- ELLIOTT WAVES-Advanced & real-time trading opportunity.
- PRICE ACTION- Real-time trading opportunity.
- VOLUME- Real-time trading opportunity.
WHO CAN USE ELLIOTT WAVE ANALYSIS?
Both complete beginners & advanced.WHAT ARE YOU GOING TO LEARN?
- One of the most powerful market timing technical tools in existence.
- In the 1930s, Ralph Nelson Elliott discovered that different stocks moved in similar price patterns called Elliott waves.
- He discovered that once complete prise cycle consists of 8 waves:
- 5 waves (1,2,3,4,5) with the trend
- waves (a, b, c) against the trend
- 3. Within 5 waves or the 5-wave sequences
- Waves 1,3,5 are in the direction of the trend- Impulse waves.
- Waves 2 and 4 correct the price of waves 1 and 3- Corrective waves.
- Once wave 5 comes to an end :
- ABC correction that follows corrects the previous entire 5 -waves sequence.
- Therefore this correction is larger in price and time compared to wave 2 and 4 corrections.
- let’s look at a basic pattern of the complete Eliott wave cycle of 5 waves with the trend and 3 waves against the trend.
Lets see, some real time elliott wave forex exampale with video.
- Price movements in stocks, commodities, forex, or any freely traded markets are linked to crowd physiology and behavior.
- Their fore wave principles are a “detailed description of how market behave”.
A KEY TAKEAWAY FROM THIS ARTICALE:”THE ELLIOTT WAVE PRINCIPAL”-
” It is doubtful if the waves of lower degrees or time frames are of much practical value. Since we are interested in the broad analysis, we will base our analysis on the intermediate degree and up.” R.N ELLIOTT Source (Book): The complete wave writings of A.Hamilton Bolton
Based on the above, we will only use 4H and above time frames for the Elliott wave analysis in this strategy.