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Why Trade the FOREX?
I was searching Google news, just trying to stay current when I came across this article [see above link] from Dr. Walker. She hit it right on the head and is one of the reasons I use the forex market as an income generating machine. Remember your education is king. Don't waste your time playing this market without expert taining!!! Visit FX Trade Central for the latest in forex education.
One of my favorite forex trading strategies involves using the Elliott Wave to trade market swings. Elliott Wave theory is named after Ralph Nelson Elliott, who concluded that the markets moved in a repetitive pattern of waves. Elliott attributed this action to the mass psychology of the market. Elliot Wave patterns follow a rhythm that the markets move up in a series of 3 waves and down in a series of 2 waves which form the base of the 5-wave pattern (the opposite is true in a downtrend).Elliott Wave Counts1. Short Covering Wave2. Pullback3. Institutional Buying Phase4. Retracement5. Retail BuyingI trade using Elliott Wave analysis quite frequently on options and sought to port that strategy to the forex market. Just like in my option trading I look for the Elliott Oscillator to pull back between 90% and 140% of my wave-3 high to set up the trade. This pullback should correspond to a 38%-62% Fibonacci retracement from the wave-2 extension.My next step is to look for confirming candle patterns, such as Harami, Tweezers or Harami cross, to trigger the trade. I draw a regression channel and look for a break above or below the channel as confirmation to enter the trade.I place my stops at the high of the wave-1 advance and trail my stop aggressively once the currency pair has advanced past the wave-3 high. A 3-bar trailing stop is my usual exit strategy.Look more into Elliott Wave and other strategies on my site as a tool for increasing your forex swing trade opportunities.
