Post on 20-Mar-2018
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
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Bull Market Trade Setups
Wave Two Wave Four Wave B
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Bull Market Trading Opportunities
Wave Three Wave Five Wave C
© 2011 Elliott Wave International — Jim Martens
Motive wave patterns fall into two categories:
1. Impulse Waves
— Including extensions and truncations
2. Diagonal Triangles
— Two types: Leading and Ending
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Motive wave patterns fall into two categories:
1. Impulse Waves
— Including extensions and truncations
2. Diagonal Triangles
— Two types: Leading and Ending
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Bear Market
Bull Market
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© 2011 Elliott Wave International — Jim Martens
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.
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© 2011 Elliott Wave International — Jim Martens
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.
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© 2011 Elliott Wave International — Jim Martens
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.
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© 2011 Elliott Wave International — Jim Martens
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.
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© 2011 Elliott Wave International — Jim Martens
Bull Market
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Bear Market
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Bull Market Bear Market
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Bull Market Bear Market
© 2011 Elliott Wave International — Jim Martens
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.
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© 2011 Elliott Wave International — Jim Martens
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
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© 2011 Elliott Wave International — Jim Martens
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.
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© 2011 Elliott Wave International — Jim Martens
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.
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The most common relationship between
waves C and A is equality.
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The most common relationship between
waves C and A is equality.
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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.
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The most common relationship
between waves C and A is equality.
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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 71