Preschool>= Lesson Status ?
Kindergarten>= Lesson Status ?
Elementary>= Lesson Status ?
Grade 1 Support and Resistance Levels
Grade 2 Japanese Candlesticks
Grade 3 Fibonacci
Grade 4 Moving Averages
Grade 5 Common Chart Indicators
Middle School>= Lesson Status ?
Grade 7 Important Chart Patterns
Grade 8 Pivot Points
Summer School>= Lesson Status ?
High School>= Lesson Status ?
Grade 9 Trading Divergences
Grade 10 Market Environment
Grade 11 Trading Breakouts and Fakeouts
Grade 12 Fundamental Analysis
Grade 13 Currency Crosses
- What is a Currency Cross Pair?
- Crosses Present More Trading Opportunities
- Cleaner Trends and Ranges
- Taking Advantage of Interest Rate Differential
- Obscure Crosses
- Planning Around News and Fundamentals
- Creating Synthetic Pairs
- Euro and Yen Crosses
- How to Use Crosses to Trade the Majors
- How Cross Currency Pairs Affect Dollar Pairs
- Summary: Currency Crosses
Grade 14 Multiple Time Frame Analysis
Undergraduate>= Lesson Status ?
- Why Keep a Trade Journal?
- Benefits of Keeping a Journal
- What Should You Record in Your Journal?
- Potential Trading Area
- Entry Trigger
- Position Sizing
- Trade Management Rules
- Trade Retrospective
- Trading Journal Statistics
- Reviewing Your Trading Journal
- Difficulties of Keeping a Trade Journal
- Summary: Keeping a Trade Journal
Graduation>= Lesson Status ?
- Which Trading Style is Best for You?
- Which Currencies Should You Trade?
- What is Your Level of Trading Experience?
- Should You Be a Discretionary, Mechanical, or Hybrid Trader?
- What Kind of Mechanical System Suits Your Personality?
- What is Your Attitude Towards Risk?
- What Kind of Stop Suits Your Trading Style?
Riding Elliott's Waves
This is probably what you all have been waiting for - drumroll please - using the Elliott Wave Theory in trading! In this section, we will look at some setups and apply our knowledge of Elliott Wave to determine entry, stop loss, and exit points. Let's get it on!
Hypothetical, will-most-probably-be-right scenario:
Let's say you wanted to begin your wave count. You see that price seems to have bottomed out and has began a new move upwards. Using your knowledge of Elliott Wave, you label this move up as Wave 1 and the retracement as Wave 2.
In order to find a good entry point, you head back to the School of Pipsology to find out which of the three cardinal rules and guidelines you could apply. Here's what you found out:
- Rule Number 2: Wave 2 can NEVER go beyond the start of Wave 1
- Waves 2 and 4 frequently bounce off Fibonacci retracement levels
Since you're a smart trader, you also take your stop into consideration.
Cardinal rule number 2 states that Wave 2 can never go beyond the start of Wave 1 so you set your stop below the former lows.
If price retraces more than 100% of Wave 1, then your wave count is wrong.
Let's see what happens next...
Your Elliott Wave analysis paid off and you caught a huge upward move! You go to Vegas (or Macau), blow all your profits on roulette, and end right back where you started. Lucky for you we have another hypothetical scenario where you can earn imaginary money again...
This time, let's use your knowledge on corrective waves patterns to grab those pips.
You begin counting the waves on a downtrend and you notice that the ABC corrective waves are moving sideways. Hmm, is this a flat formation in the works? This means that price may just begin a new impulse wave once Wave C ends.
Trusting your Elliott Wave skills, you go ahead and sell at market in hopes of catching a new impulse wave.
You place your stop just a couple of pips above the start of Wave 4 just incase your wave count is wrong.
Because we like happy endings, your trade idea works out and nets you a couple thousand pips on this day, which is not always the case.
You have also learned your lesson this time around so you skip Vegas and decide to use your profits to grow your trading capital instead.
Learn from your fellow traders and discuss Elliott Waves.
While you are logged into your account,
you can save your progress in the School of Pipsology!
- Elliott Wave Theory
- The 5 - 3 Wave Patterns
- ABC Correction
- Waves Within a Wave
- The 3 Cardinal Rules and Some Guidelines
- Riding Elliott's Waves
- Summary: Elliott Wave Theory