Elliot wave theory forecast is popularly used for technical analysis in forex and is applied to the financial industry, periodic charts for the main aim of forecasting the future of currency price. The wave principle is postulated upon the ideology that the price positions are not the result of latest news headlines but are the direct product of the ideology of the traders. There has been numerous propaganda's and rumors of times when the market price didn't drops due to the good news. It's important to know that the reaction of the traders in the forex is what actually determines the direction. In using, the wave theory is the scrutiny of the price per data in the search for identifiable patterns in the behaviors of the cost of security. This price patterns enables the technical analyst to access if the cost will fall or rise ahead of the event.
WHY THE ELLIOT WAVE PRINCIPLE IS IMPORTANT IN FOREX TRADING
It is important can't be over emphasized. The usefulness may include the following;
Cycle of mass human behaviors that is shown in the stock's price movements is where technical analysis is founded upon.
The study of the wave is important to traders & investors as it's shows the traders whether to hold or break an already incurred investment
The wave helps eliminate the risk & reduces losses incurred due to poor traders. By getting to know where prices are in the wave cycle you can know ways of eliminating risk and increasing yield entry and exit points.
HOW TO USE THE WAVE PRINCIPLE THEORY
Other forms of technical analysis are important but as a trader you should know the reason for using the wave in analyzing forex trading positions. Using the wave is a means to an end not just the end itself so is essential to use with caution. In using the wave principle you must;
You must observe the wave guidelines
You must consider the wave rules
You must be quick to accept when your result is wrong
You must use stop losses
Consider the different wave counts
You must have trading plan
You must use fibonacci in conjunction with it
Always try to work on the current statement to check whether it is standard with regards to the results
BENEFITS OF THE THEORY:
The importance of the wave can't be overemphasized. The usefulness of the wave principle is useful in that they be accurate to some degree. They include;
The wave principle is important in technical analysis
It can show the direction of marketing price
E.W can be traced with the fundamental analyses
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