Total newbie here, slowly making my way through the trading school here at Babypips.
I am at the Elliott Wave part. I am not sure I understand what to do with it. Let’s say we are talking about a bullish one.
One usage is clear, from one of the examples given in the class: you identify waves 1 and 2, 2 is at a fib level, looks legit, can be used as an indication to go long.
Same as above, but it works as a trend confirmation for a long position taken previously through other indicators.
At the start of corrective wave A, one can go short for the corrective phase.
Not sure about anything else. What is bugging me most is that I see no use for the ABC corrective waves. Nothing is explained in the babypips academy either. So I have properly identified the corrective waves, what next? From what I can imagine, I’d cover by the end of wave C a short position taken at the start of wave A. Anything else? Or are these just typical examples of the continuation/reversal chart patterns we saw in previous classes of the academy? Or are these different because they come at the end of the 5-3 pattern?
So, basically, as anywhere else, whether it’s an ABC correction or something else? What makes the ABC pattern so special?
Is it, as I asked in the last paragraph: “Or are these just typical examples of the continuation/reversal chart patterns we saw in previous classes of the academy? Or are these different because they come at the end of the 5-3 pattern?”
I had read that before starting this thread, it does not explain things anymore than the babypips pages.
So I’ve identified and am around the end of the ABC pattern. What now? Price can go up or down? Sure, as in any other part then?
Why is this even a thing? Why do we care how the 1-5 waves end, if after that ABC something totally random happens?
I suspect it is not random, and we are probably looking at the Continuation or Reversal Chart Patterns as described on this babypips school page. I’d like a confirmation of that.
Chart patterns yes I’ve learnt chart patterns but your asking what to do when your at the end of ABC pattern and i replied with make a trade. if you think you have identified a pattern.
Post a screenshot of what you have found because it’s not to clear what your asking.
I really don’t know how I can be clearer. There may be one combination of words that I haven’t used yet.
Is the 5-3 wave pattern something in itself, that you cannot separate in parts, after which something random happens? Or can we examine the ABC part separately, identify it as a Chart Pattern and use the rules/probabilities that are described for Chart Patterns in the babypips school?
I can’t see any reason why you couldn’t trade ABC pattern separate Also have a look at Goodman wave theory.
Elliot’s analysis of the market was in a time before Computer Algorithms so his wave theory may not Be exactly the same today as it was then but as a guide if it gives you some kind of edge and a way to trade then use it and apply risk management to your trades.