How Can The Elliott Wave Principle Improve My Trading?

How Can The Elliott Wave Principle Improve My Trading?

1. Identifies Trend -  A five-wave advance identifies the overall trend as up. 

2. Identifies Countertrend -The three-wave pattern is a corrective response to the preceding impulse wave.

3. Determines Maturity of a Trend - As Elliott observed, wave patterns form larger and smaller versions of themselves. This repetition in form means that price activity is fractal.

4. Provides Price Targets -  Fibonacci sequence was the mathematical basis for the Wave Principle.both impulsive and corrective, adhere to specific Fibonacci proportions ,common objectives for wave 3 are 1.618 and 2.618 multiples of wave 1. In corrections, wave 2 typically ends near the .618 retracement of wave 1, and wave 
4 often tests the .382 retracement of wave 3. These high-confidence price targets allow traders to set profit-taking objectives or identify regions where the next turn in prices will occur.

5. Provides Specific Points -
Rule 1: Wave 2 can never retrace more than 100% of wave 1.

Rule 2: Wave 4 may never end in the price territory of wave 1.

Rule 3: Out of the three impulse waves -- 1, 3 and 5 -- wave 3 can never be the shortest.