How To Use Elliot Wave for Forex Trading
How to Use Elliot Wave for Forex Trading , this is the most awaited thing about learning whether it is the Elliot Wave theory which is an example and practice of using the theory to determine entry points, stop loss and take profit. Okay, we just follow the following forex trading scenarios.
One day you will find a pattern of price movements that form an uptrend which is then followed by a downtrend as a correction. And because you have just learned the Elliot Wave theory, you determine that the wave of the trend is rising as wave 1 and the trend is falling (correction) as wave 2.
The second rule: Wave 2 will never fall under the first wave, wave 1 in the Impulse Wave.To determine the right entry point you must remember the three rules of the Elliot Wave theory and here are some of the rules.
- Waves 2 and 4 more often bounce back on the Fibonacci retracement level.
Based on your ability to Elliot Wave theory, you draw the Fibonacci retracement line and it turns out you find that the price is at the 50% level. And you can predict that wave 3 will emerge with a strong uptrend and this is the right time to buy (strong signal buy).
Because we have to limit losses, we must apply risk management by setting a stop loss on forex trading at the lowest point by referring to the second Elliot Wave theory which says that wave 2 will never fall under the first wave, wave 1 in the Impulse Wave .
Congratulations on your efforts to pay off after taking the trouble to do an analysis using Elliot Wave and Fibonacci Retracement.
The following is the second example after how to use Elliot Wave theory for forex trading that is using your knowledge of ABC-Wave (Corrective Wave) to get pips.
After you learn about ABC-Wave you find that the type is flat and will most likely form a new Impulse Wave after the C wave ends.
Well, congratulations it turns out that what you predict is true