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Solid ECN Securities | Best Place to Trade CFD Products
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[QUOTE="SOLIDECN, post: 210110, member: 80239"] [JUSTIFY][img]https://i.ibb.co/mJQDhfj/5.png[/img][/JUSTIFY] [HEADING=1][JUSTIFY]Trading with Elliott Wave (Part 1/2)[/JUSTIFY][/HEADING] [JUSTIFY]Technical analysis’ Elliott Wave theory is used to explain price changes in the stock market. Ralph Nelson Elliott created the hypothesis after observing and identifying recurrent, fractal wave patterns. Consumer behavior and stock price movements both exhibit waves. The theory holds as these are recurring patterns, the movements of the stock prices can be easily predicted. Investors can get an insight into ongoing trend dynamics when observing these waves which also helps in deeply analyzing the price movements.[/JUSTIFY] [HEADING=1][JUSTIFY]What is Elliott Wave?[/JUSTIFY][/HEADING] [JUSTIFY]The Elliott wave principle is a form of technical analysis that helps traders in analyzing the financial market cycle. With the help of this Elliott wave theory, traders can forecast market trends by identifying extremes in prices and investor psychology. Elliott Wave Theory suggests that movements of the market follow a sequence of crowd psychology cycles. The Elliott Wave Patterns are formed according to the ongoing market sentiment, which alternates between bullish and bearish cycles. [img]https://i.ibb.co/frxWbR8/el-1.png[/img][/JUSTIFY] [HEADING=1][JUSTIFY]How does Elliot Wave work?[/JUSTIFY][/HEADING] [JUSTIFY]The Elliott wave theory is a type of technical analysis that aids traders in understanding the cycles of the financial markets. By spotting extremes in price and investor psychology, traders can predict market patterns using the Elliott wave theory. According to Elliott Wave Theory, market movements are said to be influenced by a series of cycles in crowd psychology. The current market attitude, which alternates between bullish and bearish cycles, determines how the Elliott Wave Pattern is generated. The concept of wave analysis as a whole does not equal to a typical blueprint formation where you just follow the instructions, unlike most other price formations. Wave analysis provides insights into trend dynamics and aids in a deeper understanding of price movements.[/JUSTIFY] [HEADING=1][JUSTIFY]Decoding Elliott Wave Impulsive Pattern[/JUSTIFY][/HEADING] [JUSTIFY]Five sub waves make up an impulse wave, which moves overall in the same direction as the trend of the largest degree. The most prevalent and straightforward to identify motive wave in a market is this pattern. It is made up of five sub-waves, five motive waves, three of which are likewise motive waves, and two corrective waves. This is classified as a 5-3-5-3-5 structure, as was previously illustrated. [img]https://i.ibb.co/nQqrG7v/el-2.png[/img] Its creation is governed by three unbreakable rules:[/JUSTIFY] [LIST] [*][JUSTIFY]Wave two cannot retrace the preceding wave more than 100%.[/JUSTIFY] [*][JUSTIFY]Of waves one, three, and five, the third wave can never be the shortest.[/JUSTIFY] [*][JUSTIFY]Wave four cannot ever advance past the third wave.[/JUSTIFY] [/LIST] [JUSTIFY]The structure is not an acceptable structure if one of these rules is broken.[/JUSTIFY] [HR][/HR] [JUSTIFY][url=https://solidecn.com/news]Visit solidecn.com[/url] [url=https://www.trustpilot.com/review/solidecn.com]Trust Score 4.9[/url][/JUSTIFY] [/QUOTE]
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