Trading is easy, however, consistently profitable trading is where the difficulty lies. Traders since the beginning of time have tried to come up with a strategy that they could use in order to increase their win rates while minimizing their risk. In this article, we go over one of the ways in which you could do so. We discuss the different indicators, the settings used, and also go over the results. Read on to find out more.
The Elliott Wave indicator is a wave indicator that can be used to identify a trend as well as a countertrend taking place within a larger trend. It can also be used to predict price targets as well as the end of a particular trend using Fibonnaci analysis, and is often used in a variety of high-profitability setups.
The different waves usually come in different Fibonacci retracement levels, and after the first two, the rest of the waves can usually be predicted with reasonable accuracy. Each wave usually also has smaller waves within it, and each pattern has smaller versions of the same pattern within it.
Rules of Elliott Wave Strategies
The Elliott wave strategy comes with a few rules:
- The Wave 2 can never retrace more than 100% of Wave 1, i.e. point 2 cannot be below the point wherein Wave 1 started.
- Wave 3 has to be longer than at least one of Wave 1 and 5.
- Wave 4’s price trajectory should not overlap with that of Wave 1 in any way.
After the different waves have been identified, a long position could be opened along Wave 3 or Wave 5, or a short position could be opened along Wave 2 or Wave 4 based on the Fibonacci retracement levels.
The top of Wave 5 could also be used to open a short position after the reversal begins.
There are several highly profitable trading strategies that you can use in order to trade the markets and profit, but there are few that are as highly effective as the one discussed above. By implementing it even in its current form, you can make significant profits. You can also tweak the settings and alter the parameters on your own, resulting in a higher win rate and/or profitability.
- Elliott Wave Trading Made EASY, Profitable Tradingview Indicator | Become a Profitable Trader – YouTube
- TradingView Indicator