The Lazy Man's Guide To ELLIOTT WAVE

#Forex #trading #currency #money #scalping #Elliott #fx #markets

Elliott Wave Post 2; after writing the first post I have received some questions. So I thought it easier to write a follow-up post here showing some tricks.

To be clear, I am not an Elliottition as a whole, I use it as part of a wider strategy on the monthly and weekly timeframes. But also we have access to an automated Elliott wave tool.

The Elliott wave logic still works today and with a couple of little tricks, you will be able to use to help forecast potential target zones. Elliott can be very subjective and the saying goes "if you ask 10 Elliott wave traders where to plot the waves, you will get 9 different answers" So just like everything else, you need to use it wisely and not rely solely on it.

Again to reiterate - this is not a full-out lesson, there's more to learn on the topic. But these little tips will help you along the way, even to get into the overall concept a little quicker.

Step 1 - if you have this in your mind, you will be able to start the process for an overall measure.

with 1 & 2 identified you can start working on estimations for 3.

Knowing wave 3 is usually 1.618 or 2.618 - will give you a good idea of where price is heading. Again you could use things like Stochastic or RSI to assist the directional bias when you feel you have identified the 2.

Let's go all out - let's say we have the perfect setup...

We can also say that a lot of the time, wave 4 is around 38.2% of wave 3 and often no greater than 50% (whereas, wave 2 is often more than 50%)

Then lastly, if we know a potential target for 3 (maybe draw 2 target levels to test) we can use that with 2 levels for the 4 move 382 and 50 as a rule of thumb. You can see what works best for the instrument you are trading. How they play out with backtesting and so on.