This is probably what you all have been waiting for — drumroll please — using the Elliott Wave Theory in forex 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. 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.

So, using your superior Elliott Waving trading skillz, you decide to pop the Fibonacci tool to see if price is at a Fib level. Hmm, this could be the start of Wave 3, which is a very strong buy signal. 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. You go to Las Vegas or Macau , overconfident that everything you touch is a winner, blow all your forex profits on roulette, and end right back where you started.

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 in case 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 forex trading capital instead.

Using Elliott Wave To Trade Forex Markets

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How to Use Fibonacci Numbers and the Elliott Wave when Day Trading - dummies

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