Elliot Wave Theory

This basic pattern resemble fractal patterns in a graph. Know Fractals? Ah tough if you don't know).

Fractal geometry is organised where every smallest part of the geometry of the shape is the same as the unit of an existing joint geometry. Easy it is to get on with it, we see images of basic pattern of Elliot:

 

Look at the image above. Top of the line shape of highpoint 1-5 and continued with A loss to C is the basic form of Elliott Wave. Note a rise in price, according to Elliott always shaped three-wave riding and then continued with the two waves down. Vice versa, the trend was down, three waves down always concludes with two wave riding. This provision follows the following rules (see image above on the graphs 1-5 and A-c:

The waves went down (Figure No. 2) cannot pass through the beginning of the first wave of

Third wave may not be the shortest waves between wave rise which is (1, 3, 5).

Wave four should not be passing through the wave number 1.

Well that's the basic rule. Then, when the wave on top of the image we cracked up again into smaller then the solution will be the same result follow the pattern of the wave magnitude. This is what is meant by fractal patterns. Much like the branches on the tree where the smallest branch following a pattern of large existing branches. Even if the waves we cracked up again into smaller then the result follows the same pattern would be his biggest.

Now let's look at the following: forex charts:

 

Following a pattern that said Elliott is not it? The above chart is the daily chart of the AUDUSD in October up to March 2006. Notice how the wave of price movements follow the rules that have been outlined above. In fact, this pattern continued even up to at the time this article was written!

Well, that's not how. Elliott then isolate the eleven other patterns so as to complement the existing pattern into 12 pieces. Here are the eleven remaining patterns:

 

Hoplaaa, complete already. You can learn this one by one and customize it with the existing pattern. A good understanding of these patterns will greatly help your trading future. For some reason, even though it seems a bit absurd to me, but what is spelled out by Elliott have a point too. My personal trading in everyday life, the pattern of Elliott is quite helpful in identifying movements in the future.

One advantage, gave Elliott is not based on data that has occurred but rather to a pattern that may appear. Thus will greatly help us to provide the anticipated price movements that may occur in the future.

Constraints In The Use Of Elliott

OK, the Elliott Wave is indeed good. But that does not mean there are no constraints. The first constraint and the heaviest is the large number of existing patterns. Menghapalkan 12 pattern and determine the patterns of where that may happen to the forward price is obviously not an easy thing. If you are not patient enough in practice this could be menghapalkan enough to make You frustrated. Not to mention the matching price. Obviously troublesome.

The other constraint is on kekompleksannya. Admittedly pattern-pattern on Elliott is quite complex and has a number of specific rules which there could just be so custom that did not quite understand the only archetype that is. There is even a special research institution which was established only to Elliott Wave analysis using hundreds and even thousands of computers! It shows indeed use of Elliott's often ineffective for personal traders like us that in fact only understand very little use of the platform and the math.

To address both of these problems, we recommend you to use only a few basic patterns only. Can also use supplementary indicators only for Elliott and thus not buying and selling decisions of Elliott. Or any other solution you can develop a computer program that is able to recognise the patterns so you don't have to Elliott bother trade and understand Elliott manually one by one. I personally prefer the first way since I am not a programmer (boro-boro, wong read an article the length of the course can be sleepy! Moreover, so the programmer?). I just know the basic pattern and the triangle just because in my opinion the second pattern that is quite accurate. The Rest Of It? I bring into the dream only!

My advice to you who are interested in technical analysis model Om Elliott, you have to be a lot more special education reading the article for this. Learn Forex does not discuss it until to its roots in relation to time our schools is very limited. There are still many other aspects that need to be understood to be a successful trader. However if you are interested, please look it up on the internet. Just type Elliott Wave on Google then you will find hundreds of thousands of sites that discuss about it. Well, please surf on the internet.