The Elliott wave that Forex traders learn should be simple.
Knowledge from the internet and investment books is, well, almost useless.
In particular, the more complicated the theory, the less useful it is.
It cannot be used in the actual market.
There are many times when that move doesn’t apply to the market.
Therefore, the more you learn about Elliott Wave, the more garbage knowledge that does not apply to the market will increase.
If so, learn only the minimum necessary “usable” knowledge immediately.
Then just practice, practice, and practice.
Make sure you get a chance when you can use Elliott wave in the market.
In other situations, Elliott Wave should not be used.
This time, I will show you only “usable ones”.
Elliott Wave Basic Knowledge for Forex Intermediates
If you learn something, learn it as it is.
Actually, this is the most important thing in Forex.
All of Elliott Wave Theory (only this)
The wave of 0-1 is “wave 1”.
Similarly, 1-2 is “wave 2”, 2-3 is “wave 3” …
However, if there is no return to Fibonacci retracement 38.2% of the previous wave, it will not be counted as a wave.
For example, if the 1-2 wave rises without returning to 38.2%, it is counted as one wave.
Wave1 is often a sudden movement.
Therefore, it is difficult to buy at the bottom of wave1.
The wave3 tends to be the strongest ascending movement.
The wave5 is the end of the trend.
We don’t know if it will break out of the highs of the wave3.
The wave2 and wave4 often swing up and down in a zigzag movement.
So be careful as it is dangerous to sell here.
The low price of wave4 often stops at the high price of wave1.
This is all you need to learn about Elliott Wave.
Elliott Wave Pattern (Example) Collection 1
How do you count this Elliott wave?
It’s like this.
So where is the best entry point?
Basically, “buy” on the uptrend.
Where to buy?
Wait for the wave2, buy on a dip and ride the most powerful wave3.
The wave2 often swing up and down in a zigzag movement.
Therefore, basically it is better to avoid buying and selling on wave2.
Elliott Wave Pattern (Example) Collection 2
Now, the market is like this↑
Think about one basic scenario after this in as much detail as possible.
Did you think?
Only the thinker can get rich.
The waves3 has passed, so you’ll try to trade the rise of waves5, right?
Where do you think wave5 starts?
Maybe it starts with “arround here”.
Because “maybe”. Not “must”.
If so, how about next movement?
You can guess it become like it, aren’t you?
There are many markets where Elliott Wave cannot be used
This is the “basic pattern” so far.
In many cases, the market price does not move as humans expect.
Most of beginners who has just learned Elliott Wave is tries to understand everything with Elliott Wave.
Well, that might be fine at first.
Because it is a stage of trial and error of various things.
However, there are of course some situations where it cannot be used.
What to do if you can’t use it.
Use a variety of other market analysis tools to analyze the market from multiple angles.
Next time, I will explain the super-specific Elliott wave pattern at the actual market.