Hi Guys ! This post will be different from my usual style. Its gonna be combo of how to use Elliot waves to our advantage and trade setups also explained. So this will be Learn n Earn Series, just an info before jumping into analysis, please note that I follow My own style of Elliot rules which is slightly different from primary Elliott rules. I have modified those to extract more pips out of Elliott waves rather than standard one.
If you have just started to learn about waves, don't get confused with its variations and don't try to learn everything. Start slow n steady, one by one you can gain perfection, for easier understanding and better implementation stick to basic standard version of Elliot wave count (12345) for sometime, then you can move on step by step. Here we have EURUSD chart and I have started the wave count from 1.1120's in EURUSD. For those who get confused about how to count elliot waves, identify swing high or long and count alternative swing high/lows {inner swings you can skip, its ok }. Drawing Elliott is as simple as that. In the above wave count Wave 4 comes into territory of Wave 1, according my own rules Wave 4 is valid till it reaches 50% of wave 1.
The above wave count didn't give much chance for conservative traders except the channel setup around 1.1250's and there is just few pips are available to catch before end of Wave 3. The same goes for Wave-4, it was one swift move down after end of wave 3, only the pullback channel breakout gave us Entry chance to get on with Wave-4. So, even after we have drawn Elliott waves we shouldn't trade blindly, we should enter after proper setups in the corresponding direction.I have explained past trade setups to stress this point, else I will directly go on explaining current scenario.
Now, EURUSD is ranging, almost channeling to be specific bouncing up and down within channel. So if we get proper breakout to upside around (1.1260's) it will be the signal for start of Wave 5 & we can initiate our Long positions in EURUSD and our targets will be around previous resistance zone 1.1360's. But this won't be smooth ride to the top, we will have pullbacks, so we should be careful in trailing stops.
Even if we get downside breakout, we can initiate short trades in EURUSD and trail stops till 50% Fib levels(1.1180's) of Wave 1. Depending upon what happens after that Wave-5 can become valid or get invalidated.So in the current scenario, wait for the channel breakout and enter trade with proper stops. Its always good to check your tradeplan once before initiating any trade.
I hope this post has provided some insight about counting Elliott waves and how to trade them with valid setups. I have just started on Elliott's, this is not extensive explanation, will do more detailed articles explaining concepts with valid chart examples one by one. As mentioned at the start of this post, this will be Learn n Earn Series.
Hit Likes if you like the content, Feel free to leave comments/opinions even if you have slightest doubt... Happy Trading !
its great that you want to teach people elliott waves but you should really learn to use them yourself before tipping others on their use. your wave counting can use a lot of improvement and you should apply the wave principles to get a correrct count. impulsive waves never overlap, the fact that these waves all overlap each other tells me the market is currently just doing abc corrections back and forth until it finds a direction and impulses.
keep this in mind when counting waves: if price can be held in a channel, it is most likely a correction. that should help you do better counts.
and also: wave 2 never extends beyond 100% of wave 1(not even a micropip, but it can go a full 100%), wave 4 never overlaps wave 1
wish you the best.
DAVID_GIRALDO
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and yes you can see a bunch of abc patterns back to back. its called an extended correction. but each correction has a cycle. one abc must be bearish, the next must be bullish and so on and so on, and vice versa. ive recently started using vertical lines to seperate these cycles within the patterns.
this is a perfect example for you of how the abc cycles work.
this oner too.
use line charts too ;) they will make counting waaaaaaaaay easier than candles
InsiderB
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Hi David, Thanks for taking your time and effort and explaining waves with examples. I appreciate your sincerity in explaining them. With all due respect,1) If there are 10 Master elliottician's in the room, will they count waves in same pattern ? Not at all.. 2) Do you agree everyone uses their own set of rules for Wave counting ? Obviously, Yes. To avoid complexity in counting [and its not teachable in single post], as mentioned in the article above I have removed most of complex things (ex: corrective structures in Elliott's) bcos those confuse the Beginner. What I had posted above is my simple method with own modified rules and I have mentioned it. I completely respect your wave count but that doesn't mean my rules are wrong, Moreover I mentioned Elliot has so many variations and its just my style of counting. Thanks for your comment :)
danmo68
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It always gets me when someone sees it first! I was trying to apply elliot waves to this chart earlier but I could not see it! Good job sir and thank you for detailed description.
InsiderB
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With little bit of practice & experience, everyone can be Master of Elliott's. Thanks for your kind words.
pablo8
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Thank you InsiderB to share your idea ..... good explanation....
I'll definitely follow you
InsiderB
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Thank you for your support pablo8... :)
soibam666
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sir,,thanks,,its a good lesson from you,,pls continue/regards
InsiderB
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Sure, will continue with educative posts. Thanks for appreciating the effort !
keep this in mind when counting waves: if price can be held in a channel, it is most likely a correction. that should help you do better counts.
and also: wave 2 never extends beyond 100% of wave 1(not even a micropip, but it can go a full 100%), wave 4 never overlaps wave 1
wish you the best.