Elliot Wave and Fibo for the Newbies
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Thread: Elliot Wave and Fibo for the Newbies

  1. #1
    1 Attachment(s) Hi, I thought I wud post a egy I have been looking at for the last few weeks. Just fort I wud discuss it in the new people segment cause I doubt the experienced wud be interested. Its an excellent egy, its just having the ability to identify at which the price is in the Elliot Wave, that is the slightly tricky part.
    First things first. Only gona go over a few basics of elliot wave.
    You've got two main Kinds of waves:Impulsive Corrective
    The impulsive wave is the biggest move, also knows as the 'trend'. Just feel that price is shing 'impulse'.
    Subsequently corrective waves, you know when you get in with the trend then this b*tch of a movement takes out your stop. Thats a corrective. It happens basically since prices go higher or lower with the impulsive wave, it looses 'power' untill it exhausts the move. Subsequently price 'corrects' itself untill a new source of electricity kicks in again to keep the impulsive move (or the trend).
    Eventually the power will run out completely then there will be some side-ways movement and a new trend will take place. It doesnt neccessarily reverse direction, it could continue on its previous path, such as the EURGBP.
    So now we understand that that impulsive wave is the one we would like to maintain on. An impulsive wave will typically move in 5 'phases'. These are knows as wave 1, wave 2, wave 3 ,4 5.
    Here is an image of what I mean:

  2. #2
    Entered at 1.4682.
    SL in 1.4540.
    TP1 in 1.4840.

  3. #3
    Okay at the minute we wait for price to break a resistance level around 1.4570.
    If price breaks this degree partial profit goal is at 1.4625 as there is strong resistance at this level.
    If however price breaks this 1.4625 the next goal is 1.4670.
    It wud be worthwhile to maneuver the sl now to 1.4435. If price makes a clean break of 1.4460 then exit all positions.
    Lets see what happens.

  4. #4
    Ok. You see where I've drawn the fibonachi retracement on that wave. From the bottom line to the top point. This wave here's a wave '1' that I have drawn it on.
    You see the price has ceased around the 'reverse' degree on the fib. And then lasted up into the wave '5' goal, then ceased.
    This stategy basically involves getting in with this movement early on.
    It's the maximum chance of getting to that wave 5 end part , once price gets rid of the 'last' line. So the moment a pub has closed over the 'last' lineup, or the 0.784 lineup, put a buy order.

    Your stop loss shud be about the 'reverse' line. Or if prefere place it at the line over. Now Our goal isn't really 'end of wave 5' it's another one called 'end wave 3' since we have targeted wave 1. At wave 5 end line though you may want to take some profit out.

    Now once this level is reached, move the fib to wave '3'. Do exactly the identical thing again, wait for price to retrace to round the 50.0 line now tho. Then wait for price to break over the last line and put a buy. This time your entire profit goal is 'wave 5 ' finish' line.

    Ensure that you are looking at an impulsive 5 wave, rather than a corrective 3 wave. This takes some time and a chart reading to get used to it.
    There a lot more detail I cud enter but just see who is curious before I carry on.

  5. #5
    1 Attachment(s) This is your fibo plotted on tide '3'. As you can see after price cleared the 'last lineup, it went directly for the previous tide '5' end and then reversed.

  6. #6
    Oh ignore those 'buy' lines on my chart, those are my long term trades in demo account.
    Additionally this wave isn't a fantastic example as the fibonachi goes, but it is clear enough to show what I mean by distinguishing waves on the chart.

  7. #7
    1 Attachment(s) OK doesnt seem like to much curiosity about this, perhaps I am not very clear with what im talkin about.
    But here is a great example of some good trades that cud have been taken with GBPUSD about the hourly.
    In this little consolidation area im going to reveal, there was a wave 5 up. Then a wave 3 down, then a second wave 5 up which is the one displayed in my pics, and we've just finished a second wave 5 down movement.

  8. #8
    1 Attachment(s) In that last pic it's of the first wave one. So plot the fibonachi with this, and now we look for the wave 3 finish projections.
    This pic shows in crimson lines at which we expect the market to go to, which can be wave 3.
    As you see the early hours of 8th dec, price broke the 'continue' lineup and then shot up to our goal.

  9. #9

  10. #10
    1 Attachment(s) Today we need to look for where the final 5th wave will go.
    So plot the fibonachi on this large wave 3.

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