Technical Analysis
Applying Fibonacci to Stock Market Patterns: It’s easier than you might think!
Patterns are everywhere. We see them in the ebb and flow of the tide, the petals of a flower, or the shape of a seashell. If we look closely, we can see patterns in almost everything around us. The price movements of financial markets are also patterned, and Elliott wave analysis gives you the tools to interpret those patterns.
The Fibonacci sequence is vital to Elliott wave analysis — as a matter of fact, R.N. Elliott wrote that the Fibonacci sequence provides the mathematical basis of the Wave Principle. Once you understand the Fibonacci sequence, it’s easy to apply it to the markets you trade.
The following excerpt is from a new eBook from Elliott Wave International Senior Tutorial Instructor Wayne Gorman: How You Can Use Fibonacci to Improve Your Trading. Wayne explains how the Fibonacci sequence is derived and how it can be used to understand market behavior. Read the rest of this entry »
Technical Indicators: A Love-Hate Relationship
Part I: How One Technical Indicator Can Identify Three Trade Setup
Trading using technical indicators — such as the MACD, for example — can do one of two things: help you or hurt you.
Elliott Wave International’s Jeffrey Kennedy explains what he loves and hates about technical indicators and shows you how he uses them to his advantage in this excerpt from his FREE eBook, The Commodity Trader’s Classroom.
I love a good love-hate relationship, and that’s what I’ve got with technical indicators. Technical indicators are those fancy computerized studies that you frequently see at the bottom of price charts that are supposed to tell you what the market is going to do next (as if they really could). The most common studies include MACD, Stochastics, RSI, and ADX, just to name a few.
The No. 1 (and Only) Reason to Hate Technical Indicators Read the rest of this entry »
How to Identify and Use Support and Resistance Levels
Since 1999, Elliott Wave International senior analyst and trading instructor Jeffrey Kennedy has produced dozens of Trader’s Classroom lessons exclusively for his subscribers. While commodity markets are known as some of the toughest trading environments around, these actionable lessons from a skilled veteran can help you trade commodities, or any market for that matter, with more confidence.
Enjoy this excerpt from Elliott Wave International’s free Club EWI resource, the 32-page Commodity Trader’s Classroom. Read the rest of this entry »
Learn Elliott Wave Analysis — Free
Understand the basics of the subject matter, break it down to its smallest parts — and you’ve laid a good foundation for proper application of… well, anything, really. That’s what we had in mind when we put together our free 10-lesson online Basic Elliott Wave Tutorial, based largely on Robert Prechter’s classic “Elliott Wave Principle — Key to Market Behavior.” Here’s an excerpt:
Successful market timing depends upon learning the patterns of crowd behavior. By anticipating the crowd, you can avoid becoming a part of it. …the Wave Principle is not primarily a forecasting tool; it is a detailed description of how markets behave. In markets, progress ultimately takes the form of five waves of a specific structure.
The personality of each wave in the Elliott sequence is an integral part of the reflection of the mass psychology it embodies. The progression of mass emotions from pessimism to optimism and back again tends to follow a similar path each time around, producing similar circumstances at corresponding points in the wave structure.
These properties not only forewarn the analyst about what to expect in the next sequence but at times can help determine one’s present location in the progression of waves, when for other reasons the count is unclear or open to differing interpretations.
As waves are in the process of unfolding, there are times when several different wave counts are perfectly admissible under all known Elliott rules. It is at these junctures that knowledge of wave personality can be invaluable. If the analyst recognizes the character of a single wave, he can often correctly interpret the complexities of the larger pattern. Read the rest of this entry »
Happy 160th Birthday, Charles Dow
How Do You Get from Dow Theory to Elliott Wave Analysis?
If you are interested in Elliott wave analysis, odds are that you have also heard of Dow Theory, whose best and longest-lived proponent is Richard Russell. (Best wishes to Richard as he recovers his health.) This excerpt from Prechter’s Perspective explains how Elliott wave analysis and Dow Theory are connected. We wanted to run it now in honor of the 160th anniversary of the birth of Charles Dow, which the Market Technicians Association celebrates on Wall Street on Thursday, November 3, 2011. Read the rest of this entry »
How You Can Make Yourself a Better Trader
Define Yourself: What Kind of Trader Are You?
The idea of being a successful trader is exciting. The reality of becoming one is another thing. You need to understand more than the markets — you need to understand yourself.
EWI’s Senior Analyst Jeffrey Kennedy knows what it takes. He has analyzed and traded the markets for over 15 years. Jeffrey has learned what it takes to be successful, and he has the discipline to apply that knowledge. Enjoy this excerpt from his free Club EWI eBook Best of Traders Classroom, in which he answers: What kind of trader am I? Read the rest of this entry »
Understanding Fibonacci
Learn to apply Fibonacci ratios to calculate price targets in stocks
The Fibonacci ratio can be an invaluable tool for calculating price retracements and projections in your analysis and trading. This excerpt from The Best Technical Indicators for Successful Trading explains the origins of the Fibonacci sequence and how you can apply it to the markets.
You can read the entire Fibonacci section — plus 7 more lessons on how to use technical indicators to improve your trading for FREE — see below. Read the rest of this entry »
Momentum Analysis Using MACD
Learn more about using Momentum analysis to make Elliott wave trading decisions in this video by EWI European Interest Rate Analyst Bill Fox. Find more lessons on technical indicators in EWI’s newest free report. See the information below. Read the rest of this entry »
Hooking Potential Trade Set-ups
How to Combine Technical Indicators with Elliott Wave Analysis
By Elliott Wave International
Trading using technical indicators — such as the MACD, for example, Moving Average Convergence-Divergence — can do one of two things: help you or hinder you.
Using them as a forecasting method alone can be about as predictable as flipping a coin. But when you combine them with other forms of technical analysis (i.e. the Wave Principle), the same MACD can be your new best friend.