A) Share your understanding on this lecture by answering the following questions:

1. What's the application of this theory?

2. What are impulse and corrective waves? How can you easily spot the different waves?

3. What are your thought on this theory? Why?

A. 1. Elliott Wave Theory

"Elliott wave theory" is a theory that enables us to predict rises and falls on the market. Elliott found this theory by examining 75 years of market data in the 1930s. It was announced to the world with the book "The Wave Principle" published in 1938. Later, this method was named after Elliot. and has been called the "Elliott Wave Theory". For this lesson, we will call it EWT as its abbreviation. EWT is also called the 5 wave principle.

In essence, EWT analyzes common behavior patterns of investors and argues that these analyzes provide market fluctuations in a certain order. This is called "Crowd psychology". EWT is among the technical analysis tools for short. EWT makes it easy for us to predict market cycles, trends, bullish and bearish movement while doing technical analysis.

A. 2.

There are two types of waves on the basis of EWT. These are "corrective" and "impulse" waves. These waves consist of 8 waves in total. We can express these 8 waves as 5-3.

a) Impulse Wave

Such waves are types of waves moving in the direction of the major markets trend. These wave types are expressed by the first 5 waves. It is often called 1,2,3,4,5. These waves refer to us large price changes in the market.

If we need to explain these waves briefly, we can explain them as follows:

1. Wave:

This wave is the wave from which the Elliot cycle begins. This wave is among the lowest points in the market.

2. Wave:

In this wave, it is a wave that is the bullish of traders selling as the market rises. This is a small bearish wave.

3. Wave:

this wave is usually the longest wave. At this point, it is the wave that traders who see that the market is bullish contribute to the rise of the market by buying.

4. Wave:

This wave is a wave similar to Wave 2. It is a wave that occurs when investors take profits or close positions because the market is bullish. This is a small bearish wave.

5. Wave:

It is a small bullish wave caused by high-priced investors.

b) Corrective Wave:

These waves refer to the 3 waves that come after the first 5 waves. It is usually named with a, b, c. These waves have a trend in the opposite direction of the first 5 waves. Waves a and c move in the direction of the corrective trend, wave b moves in the opposite direction of a and c. These waves are difficult to detect. These waves are grouped in 3 ways according to their motions. These are named as: "Zigzag", "Flat" and "Triangle". If we need to explain them briefly, we can explain them as follows.

Zigzag

In such waves, wave b is a shorter wave than wave a and c. Internal waves are in the order of 5-3-5 and they do not disturb this order. It is a type of wave that is difficult to see.

Flat

Wavelengths are the same in such waves. Their inner waves are 3-3-5 and they keep their order. It is easier to see than "zigzag" waves.

Triangle

It is the most difficult wave type for us to see. This wave type names it as a, b, c, d, e, unlike the other two wave types. In this type of wave, the difference between bullish and bearish is small. Therefore, their internal waves are 3-3-3-3-3 and 5-3-5. In the Triangle wave type, the triangle is generally formed by lines drawn from the peaks of "a, c" and "b, d" waves. Of these waves, wave c may not always touch the drawn edge line or sometimes cross the line a little.
In order to understand these wave types more easily, we can examine the image below.

source

A. 3.

In Elliott wave theory, although it is difficult to see Combinations in general, I think it is quite effective in terms of functionality. Because I think most formations in the market are the result of the movements of the crowed. For this reason, the convenience provided crowd psychology in interpreting market movements is quite high. I see that this theory emerges as a result of examining the joint actions of the investors. This increases its functionality.

This theory makes it very easy for us to predict the bullish and bearish values in the market. Of course, if we can see it on the chart. because this theory sees or a theory . In this way, we can buy-sell according to wave movements while doing our trade. I learned this theory in such detail in this lesson. I will try to use it as much as I can in my trades. because I think investors' crowd psychology is really affected and a lot of investors are acting according to crowd psychology.

B. Choose a coinchart in which you were able to spot all impulse and correct waves and explain in detail what you see. Screenshots are required and make sure you name which cryptocurrency you're analyzing.

TRX/USD

As we said before, it may not be easy to see the EWT. When I looked through several cryptocurrency charts, I was able to find an EWT on TRX.
According to EWT, we can trade as follows.

Step 1

We see that the direction of the market is changing with a small flag formation that we saw before April 4, 2021.

Step 2

In this step, I will show the EWT on the screen shot with my drawings so that we can see it more easily.

In this screenshot, after drawing our waves, we check whether the waves obey the rules.

1. Wave: This wave is the starting point of EWT, we start from the point where a flag formation is bullish. In this way, we make purchases by guessing that the market will switch to bullish.
   We see that EWT will move in the direction of the Bullish trend.

We make sure that waves 2 and 4 are not a correction. At the same time, let's not forget that the 2nd Wave will not fall below the bottom of the 1st wave.

We make sure that wave 3 is the longest wave. We make our main buy in this wave.

We can see that wave 5 is the smallest wave. The reason for this is a small fluctuation in the bullish trend made by investors buying at high prices.

As for the trading process,

At this point, with the help of the flag formation, before the bullish trend started, I would start my trade at the lowest point of Wave 1, "0.1010". On the other hand, I place the stop-loss at a level of 2-3% so that it does not cause much loss. In order not to lose any further if the formation does not work. Later, if we want, we can sell at the end of the 1st wave. however, if we are sure about EWT, it is not appropriate to sell.

Our big buying point is the last point of the 2 waves. Because the most bullish point is the 3rd wave. so we make a big buy at the end of 2nd wave and wait for 3rd wave to finish. Of course, we do not forget to put stop-loss in this trading. At this point, we should adjust our stop-loss so that it does not exceed the starting point of the 1st wave. Because as we said earlier in EWT, the 2nd wave never falls below the starting point. If it falls, it means it is not EWT. That's why we should set our stop-loss accordingly. When we come to the end of the 5th wave, we can perform our selling transactions.

Later, if we want to operate on corrective waves;

When we reach the end of the 5th wave, we carry out the sales process. We put our stop-loss in such a way that it does not exceed the end of the 5th Wave. Because the waves that come after the 5th wave will be corrective waves and will move in the opposite direction of the trend. After C point reaches a certain level, we must close our position. Because point C is the end point of EWT. Therefore, the market may continue in the bearish trend or enter the bullish trend again.

The main point we should not forget is to set stop-loss. Thanks to stop-loss, it enables us to get out of a formation or theory that you misinterpreted with the least loss. So let's not forget to put stop-loss on all our trades.

Conclusion

I learned almost everything about EWT in this lesson.
How EWT is detected, How many types of waves does EWT consist of?, How are the internal wave sequences of EWT waves? I learned the answers to many questions like this in this lesson. Thanks to the Steemit Crypto Academy community, I am learning new information every day.

Thanks especially to professor @fendit for this lesson.

CC: @fendit