Elliott Wave Forex Trading - FXStreet

Elliott Waves Series Part 2 - The Broad Concept

Elliott Waves Series Part 2 - The Broad ConceptYou can find Part 1 here: https://www.reddit.com/Forex/comments/hieuyw/introduction_to_elliott_wave_theory_overview_of/
The primary value that the Wave Principle (from here on out, abbreviated to WP) confers on market analysts is the ability to provide context for market behaviour. Having context is incredibly important. To put it simply, the WP can be thought of as a compass. Whenever you feel lost looking at a chart (ANY chart, ANY market!), the WP will help get you back on track.
Clearing Up Some Misconceptions About Elliott Wave Theory:

  1. R.N. Elliott first discovered the WP in the 1930s using charts of the stock market. Many misinformed people believe that the WP works “best” on stocks and has been adapted for use in other markets. This is simply false. To be clear - Elliott discovered the WP. He did not invent the WP. The WP is based on human social nature and therefore it cannot be invented. It has always existed. What Elliott did was to start codifying rules and guidelines around how human social nature can be charted. Ultimately, Elliott’s objective was to be able to predict future human behaviour using the historical record. The expression of human social nature generates forms and patterns. As these forms and patterns repetitive, they have enormous predictive value.

  1. Another major misconception around the WP is that it requires a lot of discretionary analysis, and more often than not, analysts shoehorn price action to fit the Elliott Wave model. In fact, the WP has very clear rules (these rules are inviolate under any circumstance) and guidelines (these guidelines should be adhered to almost 100% of the time). While there is a discretionary element involved in counting waves, properly trained wave analysts will ultimately arrive at a consensus because following the rules and guidelines narrows the possible wave counts very quickly. Very often Wave analysts will have 2 counts at hand in terms of where they think the market is presently situated. These counts are known as the preferred count and the alternative count. These counts are validated and invalidated using price levels derived from Elliott’s rules and guidelines. The most dissent I expect from two educated Wave analysts is that one analyst’s preferred count could be the other’s alternative count. This dissent quickly resolves itself as the price action develops and validates or invalidates one count or the other. This dissent usually occurs based on wave patterns of one higher degree. It is very rare that I have seen dissent on immediate market movements.

  1. I didn’t know this was a major misconception, but someone brought this up in my first post, “I stated that Elliott Theory has better success when working in consolidations or extreme ranging markets.” This is completely false. The WP doesn’t work better or worse regardless of the market or the market conditions. That would be like saying that breathing air only works occasionally. The WP is NOT a strategy, it is the definitive model for charting human herding behaviour. Human behaviour does not show up only in periods of consolidation or range-bound markets. The markets are themselves driven by human behaviour, therefore the WP is always equally applicable. From a trading perspective, the WP is perfectly suited to capturing trends.

  1. Well, what about news events? What about supply and demand theory? What about fundamentals?! Doesn’t any of this stuff matter?? In short, the answer is no. I have previously stated that I am a macro-based investor. This is certainly true. Much of the research I consume has to do with market fundamentals and global-macro analysis. This research helps me form a view that I can overlay with the WP. From a trading perspective, when it comes to actually pulling triggers and taking positions, my decisions are always guided first and foremost by the WP. Here is a fantastic quotation from Bob Prechter on this topic, “Sometimes the market appears to reflect outside conditions and events, but at other times it is entirely detached from what most people assume are causal conditions. The reason is that the market has a law of its own. It is not propelled by the external causality to which one becomes accustomed in the everyday experiences of life. The path of prices is not a product of news. Nor is the market the cyclically rhythmic machine that some declare it to be. Its movement reflects a repetition of forms that is independent both of presumed causal events and of periodicity.”
The Bottom Line:
Elliott Wave Theory is the best forecasting tool in existence. It has determined that the market’s progression unfolds in waves. Waves can be thought of as patterns that carry the market in a direction. There are a fixed number of the different kinds of patterns these waves can take. If you really boil this down to its essence, successfully applying the WP is as simple as identifying what kind of wave the market is currently in.
I will end this now. The next part will deal with the overriding wave structure that the market is in, the different kinds of waves we will see, and why this wave structure exists in the first place.
submitted by ParallaxFX to Forex [link] [comments]

If you hated my previous TA, prepare to barf out a lung as I introduce you to Elliott Waves! :)

I thought I would share this here, I put this together last night to show the two possible scenarios that should be unfolding.
Elliott Waves are fairly complicated to explain in a few paragraphs, but the short story is that the market moves in waves.
You have the major trend which will unfold in moves made up of 5 waves, when those are complete, you get a 3 wave corrective move.
These patterns work in all time frames from decades right down to the 1min.
The longer the time frame, the "clearer" the waves are. The shorter the time frames, the more messy it can get.
Last night I put this together: http://i.imgur.com/KG0OU.gif
Im pretty bearish here so I am very comfortable counting 5 waves down. The question last night was whether we completed this 5 and are now doing an ABC corrective higher, or if we still have a leg down to go.
The red numbered count showed the alternative scenario.
This morning we got our answer and the white wave count looks like its the correct one.
If this Elliott analysis works out, once we top at at wave C, this market will be due for a hard pull back to new lows below that 1215 from yesterday. Im looking for some topping action above 1260, I plan on loading SPY Dec puts above that range if I see resistance come in.
IF this ABC correction does indeed stall out soon, be warned that the next leg down (according to Elliott Wave theory) will be ugly! (or beautiful if you are positioned correctly).
If any of you are Elliott Wave experts, feel free to chime in.
You may recognize this type of work from Todd Gordon on CNBC when he talks about his FOREX trades.
submitted by StockJock-e to investing [link] [comments]

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USDJPY: Elliott wave analysis and forecast for 30.10.2020 – 06.11.2020 USDJPY remains likely to fall. Estimated pivot point is at a level of 106.10 You will notice that I employ my own sub numbering or labelling to help me identify from where the wave count is based. This is evident on the smaller time frame of 1H. I try to determine the wave counts on lower time frames when ever possible. EG Basics of Elliott Wave Principles Corrective Wave Patterns_Summarized Form Part 1 Based on Figures gathered from Elliott Wave International ... Elliott Wave Theory is a forecasting methodology that allows traders to map the price action so they can assess the likelihood and potential extension of the future price, and trend turns. This section is home for tutorials to help traders master it.: Basic Elliott waves, wave count, Impulsive waves, corrective… - Forex Academy Wave counts traders are following now Trading with Elliott Waves Back in 1934, Ralph Nelson Elliott discovered that price action displayed on charts, instead of behaving in a somewhat chaotic ... Trading und Investment mit Elliott Wave. Lang-, mittel- und kurzfristige Prognosen von Aktien- und Devisenmärkten. Elliott Waver.de ist eine seit 1998 bestehende Quelle für die technische Analyse. Forex Brokers; Broker News; Broker Spreads; Signals; Juan Maldonado Elliott Wave Street Follow Following. Elliott Wave EUR/USD Welcome to 2020 ANALYSIS 1/7/2020 10:30:06 PM. Welcome to 2020, a ... I still have doubts that what's labeled as the 3rd-4th wave is actually the 3rd-4th for the Elliott wave within the main 3rd wave. Meaning that what's happening now is the main trend 4th wave, depending on how it plays out I will know for sure.

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