how to trade forex with the elliott wave · pdf filehow to trade forex with the elliott wave...

How to Trade Forex with the Elliott Wave Model:

Lessons in Real-Time Trading

Jim Martens, Senior Forex Analyst, editor

The International Currencies Specialty Service and Global Market Perspective

Elliott Wave International, Inc.

P.O. Box 1618, Gainesville, GA 30503

(800) 336-1618 or (770) 536-0309 Fax (770) 536-2514

www.elliottwave.com

© 2011 Elliott Wave International — Jim Martens

Although it is the best forecasting tool in

existence, the Wave Principle is not primarily a

forecasting tool; it is a detailed description of

how markets behave. … This context provides

both a basis for disciplined thinking and a

perspective on the market’s general position

and outlook.

— Elliott Wave Principle,

Frost and Prechter

2


Bull Market Trade Setups

Wave Two Wave Four Wave B


Bull Market Trading Opportunities

Wave Three Wave Five Wave C


Motive wave patterns fall into two categories:

1. Impulse Waves

— Including extensions and truncations

2. Diagonal Triangles

— Two types: Leading and Ending

10


Motive wave patterns fall into two categories:

1. Impulse Waves

— Including extensions and truncations

2. Diagonal Triangles

— Two types: Leading and Ending

12


Bear Market

Bull Market

13


Specific corrective patterns fall into four main categories:

1. Zigzag — (5-3-5) — Includes three types: single,

double, and triple

2. Flat — (3-3-5) — Includes three types: regular,

expanded and running;

3. Triangle — (3-3-3-3-3) — Four types: Three of

the contracting variety (ascending, descending,

and symmetrical) and one of the expanding

variety (reverse symmetrical);

4. Combination — Two types: double three and

triple three.

14




double, and triple








triple three.

17




double, and triple








triple three.

19




double, and triple








triple three.

21


Bull Market

23

Bear Market


Bull Market Bear Market


Wave Three — Wave three typically travels a 1.618,

2.618 or 4.236 multiple of wave one.

Within waves one, three and five,

wave three is the impulse wave

most likely to extend.

26


Wave Five — Wave five is the final wave within an impulse wave and

should clearly subdivide into five waves. Fibonacci relationships most

often found in fifth waves are as follows:

Wave 5 = Wave 1

Wave 5 = 1.618 x Wave 1

Wave 5 = .618 x Waves 1 through 3

27


Wave A — If wave A unfolds in five waves, the operative corrective

pattern is a Zigzag. A three-wave wave A implies that a Flat or

Expanded Flat correction is taking shape.

Depending on wave position,

a wave A that subdivides into

three waves could mean that

a Triangle is taking shape.

28


Wave C — If wave C is part of a fourth-wave correction, it will most often

end within the span of the previous fourth wave, likely near its terminus.

The most common Fibonacci retracement for fourth-wave corrections is a

.382 multiple of wave three.

The most common Fibonacci

retracement for second-wave

corrections is a .618 multiple

of wave one. The most common

relationship between waves

C and A is equality.

29


The most common relationship between

waves C and A is equality.


If wave C is part of a fourth-wave

correction, it will most often end within

the span of the previous fourth wave,

likely near its terminus.


The most common relationship

between waves C and A is equality.

Elliott Wave International, Inc.

P.O. Box 1618, Gainesville, GA 30503

(800) 336-1618 or (770) 536-0309 Fax (770) 536-2514

www.elliottwave.com


how to trade forex with the elliott wave · pdf filehow to trade forex with the elliott wave...

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