Typical Elliott Wave Trading Plan

There's a price for too much arrogance, a price for too much greed And in complacent ignorance, we've sown the whirlwind seed. Don Simpson, from the song Serpent's Reach Errors in trading occur due to a variety of reasons, but the most common causes of trading disasters can be traced to three cardinal sins, namely arrogance, greed, and ignorance. The sin of arrogance is less frequently seen nowdays increased volatility in the forex markets has taken its toll. Traders who presumed to possess the...

Fibonacci Ratios

1 The Fibonacci numbers are 1,1,2,3,5,8,13,21,34,55,89,144,233, 377, 610, etc. 2 Adding any two adjacent numbers will yield the next number in the sequence. Example 3 5 8 5 8 13 8 13 21 13 21 35, etc. 3 After the first four digits, dividing a Fibonacci number by the number immediately preceding it will produce the ratio 1.618. Example 34 21 1.618. Furthermore, dividing that same Fibonacci number by the one immediately following it will yield the ratio 0.618. Example 34 55 0.618. 4 The inverse...

Corrective waves and retracements

1 Methods used to predict the extent of corrective waves under the Elliot Wave Principle can vary, but the underlying approach involves the application of the Fibonacci ratios 0.236, 0.382,0.5 and 0.618 to the length of the preceeding impulse wave. 2 There are two ways to deal with a market consolidation of a larger degree. One is to watch every price tick, trying to read in it any glimmer of confirmation as to the course of the market. The other is to step back, decide on a strategy, and then...

Irregular corrections

1 It is extremely common for C waves in irregular flat corrections to be 1.618 times as long as A waves Irregular corrections are very common in forex markets, especially in the 10-minute and hourly charts . 2 Wave B in an irregular correction is frequently 1.382 times the length of Wave A. IfWaveBis 1.618 times as long as Wave A or more, then tendency is for Wave C to end at the same level as Wave A. 3 Wave C of an irregular correction is commonly 1.618 times as long as Wave A. On rare...

Impulse waves

1 A variation known as an extension may appear in one of the impulse waves. Extensions are exaggerated or elongated movements that are totally out of scalc when compared to the other impulse waves. Expect extensions to occur in only one of the impulse waves either the 1st, 3rd or 5th . Most extensions occur in the 3rd wave. Extensions may also occur in the extending wave itself. 2 Another variation in impulse waves is the diagonal triangle, a wedge-like pattern formed by two converging lines,...

Elliott Wave Principle

Applied to the Foreign Exchange Markets Elliott Wave Principle Applied to the Foreign Exchange Markets Robert Balan 1989 by Robert Balan and BBS Publications Ltd. A Vallion Company All rights reserved. No part of this book may be reproduced in any form or by any means without permission in writing from the publisher. The Wave Analyst is a Trademark of Vallion Holding Ltd.