1) Elliott wave analysis provides a predictive method for identifying trends and trading opportunities in financial markets based on recurring patterns of market behavior. 2) The best waves to trade are waves 3, 1, and 5, as well as waves A and C, as they carry the trend. An Elliott wave oscillator can help confirm the wave count. 3) Channeling techniques like trend lines and price channels can help identify transitions between waves and signal potential trade set ups. Triangles also provide high probability trade set ups. 4) The presentation provides examples of how Elliott wave analysis can be applied to spot trading opportunities in currency pairs like the EUR/USD and GBP/USD. Subscription services are available to access Elliott wave

1. Using Elliott Wave To Spot Trade Set Ups Lara Iriarte, ForexInfo.US Presented in Currensee’s Webinar May 27, 2010

2. Introduction I’ve been using Elliott wave for over 4 years now Elliott wave is the best predictive method that I know of (and it’s fun!) It’s mathematically based so it’s reasonably objective; either your wave count is accurate or it’s not If you know what the pattern is and you can identify where you are in that pattern, then you can predict what happens next Elliott wave provides an inbuilt method for placing protective stops; invalidation points

3. This Webinar will cover: Basic Elliott wave structure and core rules Which parts of the basic pattern offer the best trading opportunities and why How to use an Elliott wave oscillator to help your wave count Different channeling techniques to use to spot trade set ups Triangles

5. Core Elliott Wave Rules Wave 2 cannot move beyond the start of wave 1 Wave 3 is never the shortest wave Wave 3 always moves beyond the end of wave 1 Wave 4 cannot move into wave 1 price territory

6. So Which Waves Provide The Best Trading Opportunities? Wave 3 is the best Waves 1 and 5 are also very good Wave A can be good Wave C is a good opportunity These are all actionary waves, they carry the trend in the same direction as the wave of one larger degree

7. What’s Actionary?

8. How To Spot These Waves – Trade Set Ups Have a wave count that is correct, the litmus test here is “is my wave count accurately predicting the next move?” Use an Elliott wave oscillator (or MACD) to help you with your wave count Use channeling techniques to help identify when one wave ends and the next one begins Exercise patience!!

9. Elliott Wave Oscillator The difference between a 5 and 35 period simple moving average, presented as a histogram fluctuating above and below a zero line Use it to assist you with your wave count MACD can be used similarly, but it’s not as clear

10. EWO Basic Concepts Wave 3 should correspond to the most extreme reading on the oscillator Waves 3 and 5, and often A and C, show divergence between price trend and the oscillator trend Wave 4 should come close to, or cross, the zero line on the oscillator

13. An instance where the oscillator clearly did not work

14. Channeling Techniques Elliott’s channeling techniques (“Elliott Wave Principle” pg 71 to 72) Jeffrey Kennedy’s channeling techniques “Ultimate Technical Analysis Handbook” available as a free download from Elliott Wave International’s website Use logic and play with channels, they work best if they’re parallel

15. Elliott’s Channeling Techniques

16. How well did it work?

18. Jeffrey Kennedy’s Base Channel

19. How well did it work?

20. Jeffrey Kennedy’s Acceleration Channel

21. Channeling corrections: an example from the pound

22. How well did that work?

23. Another example…

24. How well did that work?

25. Using logic and playing with trend lines can alert us to a trend change

26. The same chart, different trend line

27. How well did that work?

28. Triangles Provide the best trade set up opportunities Stops can be set close, the risk / reward ratio is very good The angle of entry and angle of exit is THE SAME The movement out of a triangle often travels (at minimum) the same distance as the widest part of the triangle

29. Rules and Structure

30. Examples – A recent example from the pound

31. How well did that work?

32. Euro 15 minute chart

33. How well did that work?

34. How I Can Help You My service offers in-depth and concise Elliott wave analysis of the Euro and Pound You can access this analysis from three days to five days per week I highly recommend using a five day per week package, wave counts can change and you don’t want to be working with an incorrect count if its not your day to access the analysis! You can subscribe and receive access to current, historical and past analysis right now Learn more at www.currensee.com/elliott