Understanding Elliott Wave Basic Theory

One of the better known and better understood, the theories for the technical analysis and Forex Trading is the theory of Elliot Wave. Developed in 1920 by Ralph Nelson Elliot as a method to predict the trends of the stock market, the theory of fractals Elliot Wave math applies to movements in the market based on predictions about the behavior of people. In its core, the Elliot Wave Theory of claims, the market - in this case, the foreign exchange markets - moves in a series of 5 shots at the top and rear 3 wavering, constantly repeated. But it was so easy, the whole world would be a recording of the assassination of the wave to ride, and that he was flying before it on the ground. Obviously, there is much more to it.

One of the things that makes floor Elliot Wave is a delicate civilian - for all major wave theories, which is the only one that does not limit the time for responses, and the blows of the market. Only one fact is that theories of mathematical fractals, it is clear that there are a lot of waves waves in waves. Interpretation of the data and find the right curves and peaks is a sensitive issue, which is the claim that you can of 20 experts on the theory of Elliot Wave, in one piece, and they can never lead to an agreement on the question of how a Stock - or, in this case, a single currency - is addressed.

Elliot Wave Basics

• Each action is followed by a reaction.
It is a standard rule for physics applies to the holding of the Mass, in which the Elliot Wave Theory. If the price falls, people will buy. When people buy, which increases demand and supply is falling drive prices. Almost all the systems, based on the analysis of trends in the movements of the market exchange is based on the definition of such measures will be reactions, a lucrative trade.

• There are five waves towards the most important trend followed by three waves of the correction ( "5-3" movement ").
Elliot Wave Theory is that the activity in the market may be envisaged as a series of five waves, which differ only in one direction (trend), followed by three "corrective measures" waves, which move the market to its point of departure.

• A complete cycle 5-3 move.
And here begins the theory that you really very complicated. As the mirror, the mirror, the mirror, a mirror reflects, 5-3 each wave is not complete in itself, is an on-along with a series of small waves, and a subset d 'Comprehensive 5-3 waves -- The next principle.

• This move 5-3 two sub-divisions will be on the next wave of 5-3 higher.
In Elliot Wave reviews, the 5 waves, the trend marked 1, 2, 3, 4 and 5 (Impulse). The three are called to deal with the waves of a, bec (corrections). Each of these waves, consists of a series of waves 5-3, and each consists of a series of waves 5-3. The cycle 5-3, you are a student is a pulse and upward correction in the next 5-3.

• The underlying 5.3 remains constant, even if the duration of each may vary.
5.3 A wave may take decades to finish, or - it is always just a few minutes. Market participants who are successful with the theory of Elliot Wavy forex trading in the market, the thing is that the timetable for the operation, with the beginning and end of the pulse 3 and minimize risks, and their profits.

Given the timetable for the different sequences of waves as varied by changing the Elliot Wave Theory is for many a matter of interpretation. Identify the best time for the entry and exit trade depends on the ability to see in the model of small and large waves, and to know when and where to make the trade based on the drawings to identify him.

The key is to correctly interpret the structure - to find the right point. Once you learn to see the patterns, and the waves correctly identify those who say the experts, you will see how it is in all aspects of Forex Trading and are able to initiate this pattern, if its decisions are Day negotiation or a long-term future.