For the last few days I was searching the major forex forums to see what people really asked about Elliott wave theory, I prepared this short articles about the Top 9 Most Common Questions About Elliott Wave, I hope you will enjoy it and get most of it. So let’s start from the first question!
#who is the marker of the wave theory
Brilliant man names Ralph Nelson Elliott is a maker of this theory, in the late 1920 he started to analyze charts of the Dow starting from the 1 week and looking all the way to 1 hour. He figures it out that on the all charts there is a same pattern and today we know this patters as Elliott wave. He publishes his study in the book “Nature’s Law–The Secret of the Universe”. So this cover a sample few words about the Maker of the wave theory.
For more information of R.N.Elliott go here
#what is the best time frame to trade wave theory
Like I mention on the previous question, “waves can be spotted on the any time frame”, so there is a not best time frame that you can chose. I can give you advice to see which trading style you prefer more so you can decide based on that, for example if you are scalper you can try 5 min or 15 min time-frame or if you are swing trader you can try 4 hours or daily time-frame You need to make that decision not me I can just tell you that Elliott can work on every time frame out there!
#What Market work best with Elliott Wave
Here is another grate question about Elliott that I see at every forum I went. Wave pattern can be spotted in every financial market out there it is not strictly for stock, forex or futures if you know how to spot 5 waves impulsive waves in the forex you will be able to spot 5 waves move in the stock market too. So I think this is one of the biggest advantages of the wave theory. Let’s go to next question…
#why wave traders have 2 or more different analyses
I tried every indicator every system out there, but all this give me one potential direction of the where should market go next, but as we all know market won’t always go on side we want and that is why Elliott gave as grate advantage from other markets. We can have two or more trading forecasts for the same currency pair (stocks) with the wave knowledge you can put one analysis as your Primary count and you trade according to this wave count and if price don’t go in your direction you just switch to alternate to see where will market move next.
#what is the best platform for labeling waves
There is a lot of trading platform out there; personally you can use every one of them because they are almost giving you a same thing. I can just tell you that I am currently using motivewave platform not because it is fancy and all that, it’s simply because this platform give me easy wave labels and Fibonacci tools. This guy’s done a really good job implementing all together so I will stay with it, but if you don’t want to pay money for platform go with metatrader it is free and you can do Elliott wave study on it (I use mt4 for more than 2 years when I was learning Elliott). So it is all up to you to find platform that suits all your needs.
#how much is wave theory profitable
No one can really answer to this question but I will try to tell you few facts. First of all market will never move in one direction because there is a lot of facts that move market, but Elliott wave theory is using for almost 100 years by large hedge funds, banks, traders all over the world so that’s better than every other system out there. In my experience around 75-80% of my trades are winning trades so I will stay with ew for a long time..
#can some indicator help me to spot waves patterns
This is a question that I found from people that are just started to learn about Elliott and answer is YES, you can spot waves with a help of indicators. Mostly people are using this indicators RSI (Relative Strength Index), MACD (Moving Average Convergence Divergence) and Elliott oscillator, they will all showed you the almost same staff and basically you will try to find divergence on them. But to not start explain this now I will do another article where you will how this work on my blog.
#what patterns can help me to faster find waves to trade
If you don’t know where to start on the chart it is best to find some pattern that can help you to identify in what wave are you currently, you need to look for this few pattern that I think everyone with a small practice can find fast: Double Top (Show that trend is changing usually found in flat correction), Triangle ( Show that market have one more push higher or lower before trend changes, usually found in waves 4 or B) and Head and Shoulders (Show that trend is changing usual represent waves 3,4,5,A,B,C)
#what book can you recommend for learning wave principle
There is a lot of book out there, but there is a one that I think every Elliott trader has read “Elliott wave principle” from Robert Prechter and A.J.Frost. I got it in my book library grate book I can recommend it to everyone but remember you will need to read it at least 3 or more times to figure it out. Here is one more book that can help you to learn this methodology “Dynamic Traders from Robert Miner”.
I have tried to answer all questions bests I can and not boring you… If you have some more questions that you would like to ask go below and write comment I would be more than happy to answer it.
Enjoy traders I will be back with more grate educational articles soon,