Discover Some Magic To Beat The Forex: The Elliott Wave Theory For Forex Markets

Discover Some Magic To Beat The Forex: The Elliott Wave Theory For Forex Markets

Discover Some Magic To Beat The Forex: The Elliott Wave Theory For Forex Markets

One of the best known and least understood theories of technical analysis in forex trading is the Elliot Wave Theory. Developed in the 1920s by Ralph Nelson Elliot as a method of predicting trends in the stock market, the Elliot Wave theory applies fractal mathematics to movements in the market to make predictions based on crowd behavior. In its essence, the Elliot Wave theory states that the market - in this case, the forex market - moves in a series of 5 swings upward and 3 swings back down, repeated perpetually. But if it were that simple, everyone would be making a killing by catching the wave and riding it until just before it crashes on the shore. Obviously, there's a lot more to it.
One of the things that makes riding the Elliot Wave so tricky is timing - of all the major wave theories, it's the only one that doesn't put a time limit on the reactions and rebounds of the market. A single In fact, the theories of fractal mathematics makes it clear that there are multiple waves within waves within waves. Interpreting the data and finding the right curves and crests is a tricky process, which gives rise to the contention that you can put 20 experts on the Elliot Wave theory in one room and they will never reach an agreement on which way a stock - or in this case, a currency - is headed.
Elliot Wave Basics
* Every action is followed by a reaction. 
It's a standard rule of physics that applies to the crowd behavior on which the Elliot Wave theory is based. If prices drop, people will buy. When people buy, the demand increases and supply decreases driving prices back up. Nearly every system that uses trend analysis to predict the movements of the currency market is based on determining when those actions will cause reactions that make a trade profitable.
* There are five waves in the direction of the main trend followed by three corrective waves (a "5-3" move). 
The Elliot Wave theory is that market activity can be predicted as a series of five waves that move in one direction (the trend) followed by three 'corrective' waves that move the market back toward its starting point. 
* A 5-3 move completes a cycle. 
And here's where the theory begins to get truly complex. Like the mirror reflecting a mirror that reflects a mirror that reflects a mirror, the each 5-3 wave is not only complete in itself, it is a superset of a smaller series of waves, and a subset of a larger set of 5-3 waves - the next principle.
* This 5-3 move then becomes two subdivisions of the next higher 5-3 wave. 
In Elliot Wave notation, the 5 waves that fit the trend are labeled 1, 2, 3, 4 and 5 (impulses). The three correcting waves are called a, b and c (corrections). Each of these waves is made up of a 5-3 series of waves, and each of those is made up of a 5-3 series of waves. The 5-3 cycle that you're studying is an impulse and correction in the next ascending 5-3 series.
* The underlying 5-3 pattern remains constant, though the time span of each may vary.
A 5-3 wave may take decades to complete - or it may be over in minutes. Traders who are successful in using the Elliot Wavy theory to trade in the currency market say that the trick is timing trades to coincide with the beginning and end of impulse 3 to minimize your risk and maximize your profit.
Because the timing of each sequence of waves varies so much, using the Elliot Wave theory is very much a matter of interpretation. Identifying the best time to enter and leave a trade is dependent on being able to see and follow the pattern of larger and smaller waves, and to know when to trade and when to get out based on the patterns you identify.
The key is in interpreting the pattern correctly - in finding the right starting point. Once you learn to see the wave patterns and identify them correctly, say those who are experts, you'll see how they apply in every facet of forex trading, and will be able to use those patterns to trigger your decisions whether you're day trading or in it for the long haul.

(Earn Thousands Hourly (With A Forex Simulator

(Earn Thousands Hourly (With A Forex Simulator

Test-driving an online forex demo account is the preferred method of potential traders to minimize risk.  A demo account readily allows a cautious person to go online and observe exactly how a paid account would work. Think of it like playing the popular wargame Command and Conquer: you send in the troops (gobs of fictitious money), make a few tactical maneuvers (invest in speculative exchanges) and conquer territories (reap profit).
It can be addictive. Without investing and risking any real money, the investor plays with ghost money in an account and initiates buys and sells the same way it would be done in reality. The software used for these demo accounts parallels what the real trading platform does. Real figures are pulled from exchanges, trend charts are generated, and profits are calculated from buy/sell maneuvers., A trader sees at the end of the day the net loss or gain should real money had been used in the transactions.
Even a novice can trade. Let's assume an investor pretends to open a margin account with ten thousand dollars. He watches trends in the currency markets and believes that the dollar will go up in value against the British pound. The demo software empowers him to purchase at a ten to one margin; he then authorizes a buy of one hundred thousand dollars of dollars and sells one hundred thousand dollars of Pounds. There will be a spread, or difference, which accumulates to the gains, or "profit".
Why invest time with demo accounts? Simple. It's safe to learn the currency trade without having real money to lose.
Think of it like crashing your car in driving simulators or doing crazy rolls in an F-14 - on a Playstation. You stretch your creativity, test your reflexes and build your skills all behind the safety of a highly immersive computer screen. Your mind gets a full reflex workout without incurring damage to property and incurring lawsuits!
The same holds true for forex trading. Spending time with a demo account allows the potential trader to gain skills and learn the ins and outs of the game and the market place. A person is then able to see if they truly have the instincts necessary for the market and have sufficient knowledge to "play with the big boys."
Almost all online companies involved in forex trading offer demo accounts, sometimes free and sometimes for a small fee. Even if a fee is paid, it is usually worth it because a forex trader can flex his skills and knowledge for vast profits after spending some time practicing with the forex demo software.
Setting up a demo account requires nothing more than a valid email address and your name. Upon activation, you will have access to the usual charts, graphs, ordering system and even prediction tools. The latter are quite interesting, particularly predictive implements based on Fibonnacci... but take care that such tools can never predict swings in the market. Too many social, political and environmental variables cause erratic fluctuations and no software can ever take those into consideration.
Richard Peyton, my good friend,  benefited from a forex demo account. After months of study of the forex market, Jackson was convinced that he could make a go of it as a day trader in the forex market. His girlfriend, however wasn't convinced and feared the inherent risk. She considered forex nothing more than sophisticated gambling.
Richard went to a brokerage company online that he felt held good reputation. He set up a demo forex account and began to make trades as though he were using real money. After several days, on paper, Richard garnered consistent profit. He continued learning and his confidence increased that he grew anxious to open a real forex account and invest a percentage of disposable income. His girlfriend also saw how on paper he had made a nice profit and relaxed, withdrew her objections.
Today Richard and his family do very well financially through forex trading, With a demo account, he leapt into a world of vast financial potential and built a fortune. He retired his day job.


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جديد قسم : online forex trading