We always hear Elliott wave principle in the markets and many of them have also tried their best to learn or read this theory. The challenge that many faces are to practically applying it and how it looks on charts?
Below is the simple explanations and ideal Elliott wave chart which helps you understand and guide how to apply Elliott wave across all asset classes be it- Equity, Commodity Forex etc.
Ideal Elliott wave chart:
The Elliott Wave Principle works by identifying patterns in market prices. So, in other words, we start by analysing waves on a chart. Patterns consist of Impulsive as well as Corrective waves. If we can identify repeating patterns in prices, and figure out where we are in those repeating patterns today, we can predict where prices are headed in future.
Elliott Wave: A tool to forecast major turning point’s successfully!
Rules of Elliott wave:
• Wave 2 cannot retrace complete of wave 1
• Wave 3 cannot be the shortest of waves 1 and 5
• Wave 4 cannot enter into territory of wave 1
Guidelines of Elliott wave:
• Wave 3 is usually the longest and can be 1.618 / 2.618 times of wave 1 or larger if extended
• Wave 4 will usually form a triangle
• Wave 3 if extended, wave 1 and wave 5 will trend towards equality
• Wave 5 and wave 3 will usually show negative divergence which indicates loss of momentum and break of 2-4 trendline will confirm impulse 5 waves up is over and 3 waves downside correction has started.
Elliott Wave Principle helps investors in deciding where to get in, where to get out and at what point to give up on a strategy.
Trust us, it is worth the time and efforts learning this theory and you will be thrilled to see prices turn from the exact level you have derived. Wave counts with other technical tools like Fibonacci retracements, Indicators etc. helps to increase accuracy of predicting the market.
Mentorship November 2020 – Ashish Kyal, our Mentor will share across how to convert research into a trading signal using the above methods with hand holding each of the Mentees and the trades that they are taking. Application of theory along with trading psychology is must to become a successful trader. To register contact on+919920422202 or visit here