After Reading this material you should be able to do the following: Objective 1. Understand Elliott WaveObjective 2. Count Elliott Wave within 10 SecObjective 3. Learn how to use AO
What is Elliott Wave?
We believe the market has a structure. That structure is Elliott Wave.
We also believe that the structure also has a structure and that structure is shown to us on our charts by using our indicator AIMS Levels.
EW consists of impulse waves and corrective waves. We are interested in trading the impulse waves and avoid the corrective waves.
Which wave is most profitable and easy to trade?
Wave 3 is where we make money. Our strategy puts us right into the impulse waves, where the money is made.
Hypothetically, this is how Elliott Wave looks like.
Within each Impulse wave there are 5 waves. of which wave 1,3,5, are again impulse waves whereas wave 2 and 4 are corrective waves.
An impulse wave consists of sequence of 5 waves starting from 1 up 2 down 3 up and 4 down an…
Example of Setup 1 and Setup 2. In the Chart below the blue arrow that point to the Red Dot is the spot which we Call Setup 1. The next AIMS/Fractal Level immediately after it broke down is what we call Setup 2. At the Red Dot alligator was sleeping. While at the second break Alligator mouth was open to the downside. Updated 11:00 BST
The most important thing I learned few years ago was that the market was a wave. Well not the market, but the charts that we look at. It always moves in waves. Someone actually named them after themselves but we don't really need that lovely name (Elliott Wave). Because we don't need to complicate things.
When I talk about waves, I don't mean the popular Elliott Wave. I mean the WAVE we have on the most beautiful indicator called, ahem it has many names, AO, The Awesome Oscillator, The eWave, AIMS Wave etc. It helps us see the market in a smooth wave going above and below a certain Zero Line. .. It helps you ignore the going up and going down of the price concept. For us technical traders, we don't have an up and down as such specially in forex. All we see is eWave turning Red or Green.
Assuming you already know a bit about the wave. I know most of you will want to know the answer this fantastic question. How to trade the third wave?