Now I’ve been away for quite some time (slightly more than a month), I have decided to write a post about market prediction. This post came into my mind while I was in the midst of preparing some materials for forex trading.
Over time, many people have approached me, inquiring me what is the key to making so much money in the markets. My usual answer to them is that you gotta find what works for you, believe it and execute it. It’s kinda hard to believe that works (even myself sometimes) because its very simple in theory, but yet extremely difficult to adhere to reality.
For one, you have to find a strategy that works for you. Believe it or not, this isn’t the hard part of the equation. You can always look online, browse some materials, adapt other people’s strategy and modify it to your liking. The hard part comes when you have to believe what you have and executing it in the markets. Hey, it’s hard to be emotionless when it comes to money, right?
Well, if you can get past the difficult stage of trading, which is believing and executing, you’re like 95% on the way to success. The 5% lies within the strategy you undertake to trade, and this post was created in hope that I can help you to find that very 5%.
The strategy which I employ in trading encompass of price action, fibonacci, but most importantly, Elliott Wave Theory.
There are lots of materials related to Elliott Wave Theory online, not all are useful to me, neither to you. What really matter are the materials that can be used effectively in predicting movements in the market.
For one, you need to understand that a complete Elliott Wave Cycle comprises of 8 waves, broken down into 5 and 3. The 5-wave portion is known as Motive mode, while the 3 is known as Corrective mode. Also, the waves themselves are fractals. This means that the wave pattern exists not only on the present scale, but there are waves within waves, and the wave which you are counting right now, belongs to a wave of a larger degree.
If you hadn’t guessed it, Motive waves are the ones that often drive your markets to great heights and bottoms. Yes, Motive waves can be downtrend as well. This is because the deciding factor of a wave mode is if the wave is moving in the same direction as its larger counterpart (otherwise known as 1 larger wave degree).
Similarly, Corrective waves can be uptrend as well. This normally exist in conditions otherwise known as Bear Market Rally.
If you can grasp the very basic of Elliott Wave Theory, you will understand how the entire financial market work. 5-3 waves, Fractals, etc. These are the building blocks of the whole theory. There are also rules and guidelines which includes the personality of a motive wave, such as wave 2 of a Motive wave should never go beyond the start of wave 1, etc.
As this post was meant to introduce Elliott Wave Theory to the public as a key to market prediction, and not an in-depth course of the theory itself, I hope you readers can understand the fundamentals of Elliott Wave itself. There are lots of resources available online and offline, but the one which I rely on the most was written by Robert Prechter, called Elliott Wave Principle: Key to Market Behavior.
The book encompasses a lot of materials related to the work of R.N. Elliott, the founder of Elliott Wave Theory, and also guidelines THAT ARE ACTUALLY USEFUL in the live market. I have personally used them in my own trading strategy and there’s nothing more than I could say other than IT WORKS.
If you are keen in purchasing the book, I believe they do sell them in Kinokuniya or Popular (if you’re residing in Singapore). Otherwise, you can always shop online for the book here at Book Depository.
Purchasing using the link would give me a kickback, which would help me a lot in maintaining this website and also writing new articles here. I hope this article has been useful. Please drop me a message if you have any queries on Elliott Wave Theory or anything related to trading!