Forex Stock Exchange Forum
Would you like to react to this message? Create an account in a few clicks or log in to continue.
Forex Stock Exchange Forum

Forum About Trading on Forex,Stock,Binary Options, CryptoCurrency and NFTs

PAMM StratoFounds

You are not connected. Please login or register

Using the Elliott Wave Theory to Trade Forex

Go down  Message [Page 1 of 1]

time is money

time is money

As we mentioned previously, Elliott waves are fractals, with each wave being made up of lots of smaller versions of itself. For example, in the picture below, 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 corrective pattern.

[You must be registered and logged in to see this image.]
So, it’s worth keeping in mind that each wave is made up of smaller wave patterns, and this pattern repeats itself forever. In order to be able to label these waves easily, Elliott assigned a series of categories for the waves, arranged in order of the largest going down to the smallest, namely:

Grand Supercycle (biggest wave)
Sub-Minuette (smallest wave)

So, a Grand Supercycle is made up of Supercycle waves, this is made up of Cycle waves, and so on until you get down to Minuette waves which are made up of Sub-Minuette waves.

As you might expect, real-world price action charts are never as tidy as the theoretical diagrams that are used to describe them, and this makes it much harder to spot an Elliott Wave in real life. Harder, yes, but not impossible, as we can see in the following chart:

So, while you can see the difficulties inherent in labelling waves that aren’t shaped perfectly like the diagrams we’ve been looking at previously, you can hopefully also see that the theory does – in this case at least – seem to hold up quite well if you make allowances for this.

In the next couple of instalments, we’ll be looking at ways to help you identify waves correctly with relative ease, and show you how to trade forex using Elliott Waves.

Back to top  Message [Page 1 of 1]

Permissions in this forum:
You cannot reply to topics in this forum