This Elliott Channel strategy will make you money

If you want to trade in Eliot's Wave Theory, then you need to learn the concept of corrective and impulsive channels, which for its simplicity can be very useful in your commercial endeavors. These two wave types form the structure of the market, and if you can tell the difference between the two, it allows you to see high probability and low probability trades.

The impulse wave is what allows the tendency to exist. It exists as a steady step in one direction, with most price scales also moving in the same direction.

Correction is a small step. This occurs in the opposite direction of the above impulse.

The momentum highlights the direction of the current momentum. Impulses are responsible for creating trends, which means that you want to enter the correction channel while swimming – the impulse channel. Each trend consists of several pulse waves and only a few correction.

Prices are structured. In some cases, when the structure is unknown, it helps to make the transition longer. This allows you to see if the currency pair is in the form of a larger, more complex correction, which is why the structure is not so clear in the period you are looking at. You have to trade in the same direction as the impulses until there is no obvious reason.

There are several reasons to avoid trading in the direction of the observed pulses.

  • If the impulses become smaller, it indicates a reduced momentum and a probability of reversal.

  • If the impulse goes in the opposite direction, it means you have to start looking for trades that are in the new impulse direction.

This does not always mean that you are always trading. You don't want to trade every time a price change occurs. If the price structure is not clear then take it a step further. The wave structure occurs at each time point, which means that the pulse waves that are higher than the graph in one minute can be a rectifying wave against the decrease in the 10 or 15 minute graph.

Don't let this scare you away from trading over time, but try to keep some perspective on where you are planting for trading in relation to the trends and trends that are observed at other times of the year.