Advanced Trading Strategy Using the Elliott Wave Tool

Hello everyone, How are you doing, I welcome you again to my blog in the Steem Alliance community.

Today, we will discuss an interesting topic on the platform which will be: Advanced Trading Strategy Using the Elliott Wave Tool

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Elliott's Elliott Wave trading strategy is a powerful trading tool that is purposely used for identifying continuous wave patterns and also can be used for predicting market trends, elliott wave analysis is an advanced technique that goes way deep into the market pattern structures and they can be used in trading.

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In this article here on today, we will discuss the advanced wave patterns, the practical application of Elliott Wave Theory, and trading strategies based on Elliott Wave tools.

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Advanced Elliot's Wave Patterns Structure

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Complex Correction: - This complex correction consists of two types which are the Double Zig-Zag and Trippe Zig-Zag

Double Zigzag (WXY): - This complex corrective pattern is made up of two straightforward zigzags separated by an X-labeled intervening wave, It usually occurs in markets that are moving in the opposite direction.

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Triple Zigzag (WXYXZ)] - This is just like an extension of the double zigzag that consists of three short zigzags that are separated by two X waves. Although it is uncommon, this pattern is usually used to identify long-term corrective phases.

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Elliot Triangles Wave:

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The Contracting Triangle: This is a five-wave ABCDE pattern that starts within convergent trendlines, It usually signals and identifies the continuation of the previous trend and occurs in wave B or wave 2.

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Practical Application of Elliott Wave Theory Trading Strategy

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Counting Of Waves:

The first thing should be counting the five-wave structure in the direction of the main trend, to "identify the impulse waves", Waves 2 and 4 are corrective, while waves 1, 3, and 5 are impulse waves.

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Secondly, we need to Find the Corrective Waves and search for three-wave structures (ABC or 123) that go against the main trend. These corrections can take the form of zigzags, or sometimes in triangles patterns.

Thirdly, You can as well use "Relationships based on Fibonacci:" to measure wavelengths, and make use of the Fibonacci retracement levels, Corrective waves typically target retracement levels of 38.2%, 50%, and 61.8%, whereas impulse waves typically target retracement levels of 161.8% and 261.8%.

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Elliott Wave Trading Strategies

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Impulse Waves Trading:

Make an Entry Using Wave 3: You can start trading during Wave 3, which is the longest and strongest wave in the five-wave impulse pattern, Check the number of waves and look for a big breakout with a lot of volume.

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Wave 5 Entry Confirmation: After confirming the completion of Wave 4, enter a new trade at the beginning of Wave 5, even though Wave 5 is typically shorter than Wave 3, it still gives more opportunities for profitable trading.

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Conclusion

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Elliott Wave Theory's advanced strategies provide traders with a superb method for analyzing and predicting market trends, Traders can improve their analysis and decision-making abilities by gaining an understanding of the intricate wave patterns, using useful wave counting techniques, and maybe sometimes incorporating with the Fibonacci levels.

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