Exchange and the Anatomy of an Elliott Wave

Exchange and the Anatomy of an Elliott Wave

As you enter the world of Forex you will immediately feel the basic need all Forex traders: a method or technique to predict market behavior with the highest accuracy.

There are a number of methods and techniques that traders have researched over the years with this goal. These techniques are based on different indicators and approaches to trading, and each has its successes and positive results when applied to specific market conditions, but there is no doubt that among the most successful of these techniques will find Elliot Waves as one of the best concepts and methods can be learned.

Ralph Nelson Elliott noted that markets have strong tendencies that seem to follow a repetitive pattern in all the different time frames can be commercial and after analysis of a large number of charts he discovered in the late 1920s that the markets are moving in a repetitive way away from completely chaotic behavior.

He divided market movements in trends, corrections and sideways movements. These differences are then assigned to do the wave terminology of these periodic movements, he called the trend movement impulsive wave correction and corrective wave.

In order to establish the impulsive wave we need five constituent waves "inside" this wave. This will be three waves in the direction of the trend and two corrections regarding the trend.

But, given the fractal nature of the waves found by Elliott, then each of the smaller impulsive waves will have the other five waves "inside".

In the case of corrective waves that will be formed by the other three smaller waves. Two in the direction of a correction in the direction of the trend.

Given the repetitive nature of Elliott waves can make a pretty accurate forecast of what the markets will do next with this is a huge advantage in your daily encounters with foreign markets.



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