Trading With Elliott Waves

Predict market trends using Elliott Waves →

Hey there 👋🏼

Today in less than 5 minutes:

1) How a retired American accountant changed the way one looks at market trends
2) Understanding market trends with ‘waves’
3) What’s up with Apple’s stock

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A 1930 discovery that changed the way people looked at markets

American accountant Ralph Nelson Elliott was forced into early retirement due to an ailment and decided to study the behaviour of the stock market to occupy his time.

Elliott examined yearly, monthly, weekly, daily, hourly, and half-hourly charts of the various indexes covering 75 years of stock market behavior. And found out that the market follows a particular pattern of waves, which was predictable.

Did it work though?

Well, after the Dow Jones had declined throughout early 1935, and people had the 1929-32 crash fresh in their minds, Elliott stated that as per his theory, “All averages are making final bottom”. And soon after, the 13-month-long correction was over and the market immediately turned to the upside.

Thanks to Elliott's groundbreaking research, the Wave Theory is now utilized by thousands of institutional portfolio managers, traders, and private investors in their investment decisions.

Fun fact: Studying the depths of human behaviour, Elliott tied the patterns to the ‘golden ratio’, or the Fibonacci series, one of the most powerful mathematical laws of the world. You can learn to discover the power of the Fibonacci numbers in trading in the Fibonacci Trading Course taught by Ms. Jyoti Budhia, who has 37+ years of trading experience.

Now, let’s learn about how to draw and interpret and Elliott Wave.

Understanding the Elliott Wave theory

The Elliott Wave states that human behavior causes stock market prices to trend and reverse in recognizable patterns. These patterns are repetitive in form, but not in time or amplitude.

Called ‘Elliott Waves’, one complete cycle of the structured progression consists of 8 waves divided into 2 phases,

  1. Impulse Waves: Made up of 5 waves (1,2,3,4,5), impulse waves move in the same direction as the larger trend.

  2. Corrective Waves: Made up of 3 waves (A, B, and C), impulse waves move in the same direction as the larger trend.

Depending on the larger trend being bullish or bearish, one entire cycle looks like this:

Bullish Elliott Wave

Bearish Elliott Wave

These Elliott waves link together to form larger versions of those same patterns. They, in turn, link to form identical patterns of the next larger size, and so on, something like this:

There are many chart patterns and strategies you can use with Elliott Waves to trade in the intraday, positional, and long-term time frames.

The key to successfully trading Elliott Waves lies in successfully identifying where a stock is currently in the cycle.

In fact, we looked through a few charts looking for an Elliott Wave pattern, read on to see what we found!

Learn to use Elliott Waves for intraday, positional, and long-term trading strategies in Mr. Ashish Kyal’s Trading With Elliott Wave Theory Course. It’s currently available at a 50% discount, so HURRY UP!

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Do you use Elliott Waves?

Are you able to spot any charts which are showing the Elliott Waves pattern? Hit ‘reply’ to this email and send us examples!

A new ‘wave’ in Apple’s stock

We tried looking for charts where the Elliott Wave theory can be applied. And could make out a pattern in Apple’s stock chart…

AAPL, 1D

The above chart shows a complete Elliott Wave and the beginning of a new one.

Now that you have learned about the wave theory, tell us which way will Apple’s stock go from here by replying to this email 📧

Learn to use Elliott Waves for intraday, positional, and long-term trading strategies in Mr. Ashish Kyal’s Trading With Elliott Wave Theory Course. It’s currently available at a 50% discount, so HURRY UP!

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