Elliott Wave: The Devil Is In the Details

Probably the strongest argument critics use against the Elliott Wave Principle is that traders could often come up with two or more sometimes equally probable scenarios for the market’s future direction. That is true. In an environment filled with uncertainty, it is not always easy to pick just one single count. In fact, we suggest you…

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The Mischievous Running Flat Correction

In “Expanding Flat and How to Avoid Its Traps” we examined probably the most common type of flat correction the markets could offer. It is easy to spot and relatively easy to trade. However, if you are constantly expecting the expanding variety, you are not going to be prepared for its exotic, but deceptive cousin…

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Why Waiting For Confirmation? A Tale Of Greed

Every trader with enough experience in the market usually comes to the conclusion, that he needs a system of rules to go by. Rules, which should not let him abandon his discipline and get emotional while trading. Every trading methodology has one such system, which tells you when to go in and out of the market.…

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What Is Fundamentally Wrong With Fundamentals?

Can you guess which country has the best-performing global stock market so far in 2015? Germany? Japan? USA? Nope. The Business Insider came up with the “surprising” answer yesterday. It is Russia. Yes, Russia – a country in a state of war, whose currency has been suffering terribly against the US dollar and the euro. If…

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When Does an Elliott Wave Setup Fail?

As a rule, you should never give up on a trade, if it still has the potential to develop in your favor. But how to determine, if a trade is no longer valid? Fundamental market analysis does not provide such information at all. Conventional technical analysis rarely gives you a concrete level for the protective stop. Only…

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How to recognize an unreliable support?

“The support level is an area below the current price, which has prevented it from falling further in the past. That is why we would usually expect prices to bounce up from it again, when this support level is reached in the future.” This is the short definition of a support level and how traders…

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How To Read A Corrective Combination

Corrections are movements against the larger trend. So, when the correction is over, the larger trend should resume. Those of you, who are familiar with the Elliott Wave Principle, know that there are three types of corrective patterns – zig-zags, flats and triangles. In our Elliott Wave Patterns lesson we have discussed all three of them. Usually,…

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A Confusing Type of Flat Correction

In our Education Section there is a lesson, called “Elliott Wave Patterns”, where you can learn in details about all three variations of the flat correction. The most important thing you should know about a flat is its wave structure. It consists of three waves, labeled A-B-C. Waves A and B have three sub-waves, while…

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Where to start your Elliott Wave count from?

The Elliott Wave Principle gives best results only when it is correctly applied. Furthermore, it does not provide mechanical signals like most other technical approaches. In order to be able to see the present situation with all the probable alternative counts, one must have trained eye, creative imagination and patience. Once mastered, the Wave Principle…

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Expanding Flat and how to avoid its traps

If you think that corrections are movements against the larger trend, you are absolutely right. But if this is true, why should you expect from a correction to make a new bottom in a downtrend or a new top in an uptrend then? Because sometimes the power behind the trend is so much, that its…

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Truncated fifth wave. “The Black Swan”

Truncated fifth wave. “The Black Swan”

Truncated fifth waves are among the trickiest patterns in the catalogue of the Elliott Wave Principle. The worst about them is that you can not predict a truncation. You can only guess, but the fact that a truncation may occur once in a hundred times makes guessing pointless. In this article we will use USD/JPY…

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Where the protective stop should be?

Where the protective stop should be?

It is not difficult to get emotional about trading. And as many of you probably know, emotions are rarely helpful, when you have to make financial decisions. So, what can we do as traders, in order to protect ourselves from our own human imperfections? And the answer is one – to put our protective stop…

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Ending Diagonal? What is this?

Ending Diagonal? What is this?

In conventional technical analysis they call it “wedge”. In Elliott Wave analysis we call it “ending diagonal”. Both terms imply the same thing – reversal ahead, but since we work with the Wave Principle, we will refer to it as an ending diagonal. So, what is it? On the example chart below you can see…

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What is an Expanding Triangle?

What is an Expanding Triangle?

In terms of position of occurrence, wave structure and consequences the expanding triangle is the same as the regular contracting triangle. It can occur as a wave X, wave B or wave 4. It is a sideways movement. It consists of 5 waves marked a-b-c-d-e, structured 3-3-3-3-3. It also precedes the final movement of the…

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