Elliott Wave Training

Are you looking to learn the Elliott Wave principle? Or maybe you already have some experience and want to find the ways to improve your skills better.

Click on this post for details:

http://wavepatterntraders.blogspot.com/2012/04/elliott-wave-training.html



Showing posts with label Education. Show all posts
Showing posts with label Education. Show all posts

Monday, August 12, 2013

B Wave Examples (Elliott Wave Education)

I was asked a great question and thought i would write a small article/post about it.

The question was :

How much of wave [B] needs to correct wave [A] in an ABC correction?

For non Elliotticians that probably means nothing.

An ABC correction is simply some sort of 3 wave move like Fig.1

Wave [B] must correct some part of wave [A], as if it don't correct any part of wave [A], then it cant be labeled a correction.

Wave [B] corrects some part of wave [A] before continuing in wave [C].

The key point is the end point of wave [B] MUST be inside the length of wave [A]

The normal retracement is around 50-61.8% of wave [A], but it can vary and there is no set limit, but it MUST move into the wave territory of wave A like as shown in Fig.2 & Fig.3

Fig.2 is a simple Zig Zag, but note that wave [B] enters into the territory of wave [A], that is a MUST

Fig.3 is a triangle for wave [B], but the end point to a triangle is at wave E, so as long as wave E is inside the length of wave [A] then its valid in the case of a triangle.


Fig.2 & Fig.3 are correct labellings of a [B] wave, although there are other ways to label a [B] wave, I have shown 2 common examples that traders will see on a regular basis.

Fig.4 is incorrectly labeled

At 1st glance you can see that some part of the triangle is inside the wave [A], but if you look closer, the end point of wave [B] is outside the length of wave [A], so it can not be labeled like so.

Fig.5 is correct, the end point to wave [B] is inside the length of wave [A].


Monday, April 29, 2013

Elliott Wave Education (Ending Diagonal)

I thought i would write a few post about the various Elliott Wave patterns but use real life examples to show how readers can trade the pattern and where to put stops etc.

So the 1st pattern i want to show is the ending diagonal.

This past week i had been tracking an ending diagonal on the AUDJPY pair

Before


After


The pattern is basically a wedge shape, but it has 5 legs and each leg is made up of 3 waves.

Wave 5 can never be the longest, and as its contracting wedge shape, so wave 3 tends to be shorter than wave 1 and wave 5 shorter than wave 3 etc. Although there are instances where wave 3 is slightly longer than wave 1, we call this an unorthodox ending diagonal, as if the pattern meets the other criteria then its a valid working idea, especially if the overall look has a wedge shape and wave 5 is shorter than wave 3 etc.

I was looking for a 5th wave to a new marginal high but i also knew that it must stay below 102.88,  that was our risk point, this was a live setup, "not after the event" so members were fully aware of the risk that came with the setup

By knowing your risk control point you can feel at ease and not have to be concerned about extended losses, as by knowing your maximum loss before being stopped out is far easier to deal with, than being stopped out when you have no control and cant admit the idea is wrong

Elliott Wave gives you that risk control point with patterns and ideas, i don't know of any other system that offer this control.

You can read about ending diagonals in Frost & Prechters book here:

http://www.scribd.com/doc/7381626/The-Elliott-Waves-Principles-Frost-AJ-PrechterRobert-R

Page 12


Saturday, August 4, 2012

Elliott Wave Corrections



Corrections in Elliott Wave tend to cause the most problems, counting a 5 wave move is pretty easy to most traders, but where traders run into issues is corrections.

The rally from the June lows has been a very complex and difficult move to count let alone trade
There are many types of corrections but it simply comes down to 3 set ups based on the number of waves

ABC = 3 waves

WXY = 7 waves (ABCXABC)

WXYZ = 11 waves (ABCXABCXABC)

So if you count the number of waves from the June lows ask yourself the question.

How many waves do you see?

Is it impulsive looking or corrective looking?

Do you see 5 non overlapping waves as part of an impulse wave or loads of overlapping waves?

If you can answer those questions then you are well on your way to making some important choices about the next likely direction in both the AUDUSD and SPX