Elliott Wave Theory

Hallo everybody, i’m Eros, 22 yo from Italy, and i want to ask you a question…
Does someone of you uses the Elliott Waves Theory to trade? I have heard thet EWT is used in combination with Fibonacci Retracement.
Is it a good way to trade in the Forex market?

Elliott Waves are (in my opinion) definitely a real phenomenon but “trading them” is easier said than done. First off, do not use ZigZag indicators because tehy repaint. Second, google “Gartley Pattern,” - it is an elliott wave pattern that fits the Fibonacci ratio. Other good patterns to trade (supposedly) are “butterfly” and “bat.” Gartley, however, has the best RR ratio… I think (someone correct me if I’m wrong).

Here’s a few threads on the subject…

http://forums.babypips.com/gbpjpy/10964-gbp-jpy-technical-analysis.html
http://forums.babypips.com/forextown/21934-30-pips-day-keeps-your-money-bay.html
http://forums.babypips.com/free-forex-trading-systems/30406-system-cant-lose.html

Only you can determine if it’s a good way for [B]you[/B] to trade…and the only way to know that is to try it.

:slight_smile:

I use elliot wave, It’s a great method for long term trading. The well defined rules allow you to place stop-losses in a very intelegent manner, and you can use it with fibonacci to find good entrys and profit targets. For example, here is a trade I have planned with gbp usd:

So naturally I would enter short at the 38.2% level, which is a good estimation of when the 4th wave will end. I would place The stop loss just above the lowest point of the 1st wave, and the take profit would be be the price at the 38.2% level - the size (by price) of the first wave. This creates a high probability trade with a r:r ratio of 1:2, which is great for long term stability and growth.

I know that i have to find a trade method that fits me, so i’m trying to ask to experienced traders to find out the “best” trading method, that also fits my needs. :smiley:

ehm… What do you think about Volume Spread Trading? I think it’s some kind of scalper strategy…

Read all about Elliot Wave and Fibonacci, it will help you tons, and it will give you and edge over most new traders that only know basic candle stick patterns and indicators.

Could you please give me some sites or books where i can learn more about Elliott Wave Theory and Fibonacci?
Thank you so much for answering :slight_smile:

You can try Elliott Wave International - Elliott Wave Dot Net

Also, wikipedia has some consise and acurate information.

As for books, you can try The Elliot Wave Theory: The Key To Market Behavior by Robert Pretcher.

And, of course, you can always use babypips school to learn about fibonacci.

Please feel free to ask any other questions.

Hi ,

I would be grateful if you kindly answered my following question .

In an e.g. intermediate triple three combination , could Z’s minor formation be something other than Flat , zigzag or Triangle ? And in case it is not , then if this minor formation is of the form ABC (and not triangle) , could C be something different from an impulse or ending diagonal ?

Finally , could the minor internal formation of the intermediate (X) waves be double three ?

Thanks
safrankoz

  1. Z cannot be anything but a flat, zigzag or triangle.
  2. C must be a motive wave, either an impulse or ending diagonal regardless of whether or not it is in a triple three.
  3. The X wave can in fact be a double three. Here is a picture I found that ilustrates that:

thanks very much .