The ABCD Let’s start this lesson with the simplest harmonic pattern. So what could be more basic than the good old ABCs? We’ll just pop in another letter at the end (because we’re cool like that), and we’ve got the ABCD chart pattern! That was easy! To spot this chart pattern, all you need are ultra-sharp hawk… Continue reading The ABCD and the Three-Drive
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Harmonic Price Patterns in the Forex Market
Now that you’ve got the basic chart patterns down, it’s time to move on and add some more advanced tools to your forex trading arsenal. In this lesson, we’ll be looking at harmonic price patterns. These bad boys may be a little harder to grasp but once you spot these setups, it can lead to some very nice… Continue reading Harmonic Price Patterns in the Forex Market
Summary: Elliott Wave Theory
Here’s a summary of what we covered regarding the Elliott Wave Theory: Elliott Waves are fractals. Each wave can be split into parts, each of which is a very similar copy of the whole. Mathematicians like to call this property “self-similarity”. A trending market moves in a 5-3 wave pattern. The first 5-wave pattern is called impulse wave.… Continue reading Summary: Elliott Wave Theory
How to Trade Forex Using Elliott Waves
This is probably what you all have been waiting for – drumroll please – using the Elliott Wave Theory in forex trading! As an Elliott Wave trader, you will be spotting “wave counts.” This means that you will be labeling the waves to see how they conform to the Elliott Wave pattern, to try and anticipate future price movement.… Continue reading How to Trade Forex Using Elliott Waves
3 Cardinal Rules of the Elliott Wave Theory
As you may have guessed, the key to using the Elliott Wave Theory in trading is all about being able to correctly identify waves. By developing the right eye in recognizing what wave the market is in, you will be able to find out which side of the market to trade on, long or short. There are THREE… Continue reading 3 Cardinal Rules of the Elliott Wave Theory
Fractals: Elliott Waves Within an Elliott Wave
Like we mentioned earlier, Elliott waves are fractals. Each wave is made of sub-waves. Huh? Let me show you another picture. Pictures are great, aren’t they? Yee-haw! Do you see how Waves 1, 3, and 5 are made up of a smaller 5-wave impulse pattern while Waves 2 and 4 are made up of smaller 3-wave… Continue reading Fractals: Elliott Waves Within an Elliott Wave
Corrective Waves
The 5-wave trends are then corrected and reversed by 3-wave countertrends. Letters are used instead of numbers to track the correction. Check out this example of a smokin’ hot corrective 3-wave pattern! Just because we’ve been using a bull market as my primary example doesn’t mean the Elliott Wave Theory doesn’t work on bear markets. The same 5-3 wave… Continue reading Corrective Waves
Introduction to Elliott Wave Theory
Elliott Wave is a form of technical analysis that was developed by a dude who noticed that financial markets move in repetitive patterns due to underlying crowd psychology based on greed and fear. Back in the old school days of the 1920-30s, there was this mad genius and professional accountant named Ralph Nelson Elliott. By analyzing closely… Continue reading Introduction to Elliott Wave Theory
Heikin Ashi Cheat Sheet
Heikin Ashi is a type of price chart that consists of candlesticks. Modified Japanese candlesticks. A Heikin Ashi chart filters market noise and provides a clearer visual representation of the trend. For beginner traders, this means that the trend is easier to see. For experienced traders, the Heikin Ashi charts help keep them in trending trades, while… Continue reading Heikin Ashi Cheat Sheet
Limitations of Heikin Ashi
What are the limitations of Heikin Ashi? Unfortunately, Heikin Ashi is not the holy grail. Heikin Ashi definitely ain’t no Ed Sheeran song. It ain’t perfect. Just like any other tool used for technical analysis, Heikin Ashi is useful but it does have some weaknesses or limitations. Let’s go over what these limitations are. Heikin Ashi candlesticks… Continue reading Limitations of Heikin Ashi