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A Trading Strategy Using Elliott Wave Analysis

Scenario 2:.

The Elliot wave principle is a form of technical analysis and followers of Elliott wave principle use it to analyze the markets and forecast market trends by identifying the highs and lows in price. This article is simple a basic explanation of what the Elliott wave theory is . Elliott-Wave Fibonacci Spread Trading Presented by Ryan Sanden The inevitable disclaimer: Nothing presented constitutes a recommendation to buy or sell any security. While the methods described are believed to be effective in Principles of Elliott Wave Theory Markets tend to advance in 5 waves, and retrace (correct) in 3 waves.

SWING TRADING LESSONS

Elliott Wave is a great trading tool for trading trends. However, it’s not as confusing as a lot people make it out to be when you consider the primary objective of the tool. However, it’s not as confusing as a lot people make it out to be when you consider the primary objective of the tool.

A counter-trend is a correction to the prior impulse trend. Waves of Similar Degree — Also called swings of similar degree. Waves of similar degree represent the subdivisions that make up a completed structure. In an impulse trend, waves one-five are the waves of similar degree. The subdivisions of each wave are waves of a smaller degree.

Subdivisions of a Wave — Any given wave may subdivide into smaller degree waves to complete the structure of the wave. For instance, Wave-1 of a five-wave impulse trend usually subdivides into five waves of lesser Copyright , Dynamic Traders Group, Inc. This zone is a POWERFUL rejection against the trend in force, the probability of a reversal at this zone is not only high, but the behavior of the reversal should be a violent move higher. Todays decline was very sharp and brought N50 down to As of my last count I favored a wave 4 correction, but the Fibonacci of more than 0.

Steem is currently in the swing trade area and forms the short-term and medium-term correction zone in its downtrend trend. We find Steem's oscillator area quite wide, we will closely monitor this trading code to find the best order. Any PO area will be moonlit with this lightning fast code Please select the most effective trading area with this code Not a XRP fan, but looks like a healthy move!

Let the chart speaks for itself. What do you think? Look left, Weekly resistance has broken for a downtrend. At the present H4 group wave has a rule symmetry at the wave 2. Wave 3 could extend as high as 1. I'll be looking to buy pull backs on the lower time frames.

The last top has reached the Zone of Daily wave Should to sell follow the Reversal signal drop beyond fibo Extension Sell from the wave 2 to wave 3.

The Bitcoin blocks are going to be full again very soon. Trying to trade against the main trend is extremely risky. The wave count should tell you what the main trend is. Invalidation points are the most obvious place to put stops, and targets are the most obvious point at which to take profit.

But this does not tell you where to enter a trade or how to add to your position. In an effort to bridge this gap I offer the following. Please feel free to add your own comments and suggestions. Actionary waves are waves which carry price in the direction of the main trend.

Within an impulse or a diagonal actionary waves are 1, 3 and 5. Within a correction actionary waves are waves A and C. For each actionary wave the method is similar. Draw a trend channel around the prior reactionary wave. When the channel is breached then the next actionary wave should be underway, at that point enter a trade in the direction of the main trend.

For the example above we enter a long position to trade the third wave upwards when price moves above the small orange channel containing the second wave zigzag. You would calculate a target at which point you could close the trade and take profit. However, targets are not always met. If price falls short of the target how do you know when to get out? Draw the channel from the highs of 1 to 3, and place a copy on the low of 2.

If this does not contain wave 4 then redraw the channel as follows: When the channel is breached in the direction opposite to the main trend in which you are trading then you should exit the trade. In exactly the same manner you would enter a trade for a fifth wave when you have confirmed that the fourth wave is complete:. And you would either take profit at your calculated target if price reaches the target, or you would exit the trade when it is clear that the trend has changed.

What wave degree you choose to trade will depend entirely upon what style of trading suits you best. Using this strategy you would trade this first wave at intermediate degree which may last several weeks to a few months.

If your calculated target was reached you may exit about the high. If price fell short of your calculated target you would exit the trade when the channel is breached in the direction opposite to your trade. In the above diagram you may add to your position in the early stage of the third wave, and again in the early stage of the fifth wave. You can take this idea and move it down one degree; you may also add to your position when each of the lower degree corrections are confirmed complete with their own channel breaches.

There would then be several opportunities to add to a position.

Hypothetical, will-most-probably-be-right scenario #1:

Because they move with the main trend-which is up. In the following example the third wave is downwards.

Closed On:

The picture above is a mock-up that shows the progression of markets as seen in Elliott Wave. I placed this green circle expecting that this is a key point for a perfect turn around.

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