Ralph Nelson Elliott introduced The Elliott Waves Theory in forex. According to him, the movements in the currency trading are in form of waves or cyclic patterns. He named it as “Elliott Wave Theory” based on the psychology of traders. While studying the forex market, Elliott observed that the markets sometimes follow emotional patterns because of some outside influences and mostly were not as chaotic as one thought.
Elliott in his observation considered the unique characteristics of wave patterns and making predictions on the basis of the patterns in the market. The Elliott Waves theory in online forex trading works on another assumption that market moved in five waves on the upside and three waves on the downside. The price movement can be forecasted by picking out these distinct patterns. The first three waves of the Elliott Waves Theory in online forex trading represents the impulse or the up-waves in a major bull market, while the next waves stand for the corrective or minor downward waves within the major bull market.
It is a well known that in forex trading market for every action there is an equal and opposite reaction. The prices may move in upward or the downward direction, it needs to be followed by an opposite movement. The price action is divided trends and corrections or sideways movements. The trends represent the general direction of the market, and the corrections move against the trend. According to Elliott Waves Theory in forex trading these movements are labeled as the impulse waves and corrective waves.
Free Daily Elliott Wave Forex Forecast
Earnforex.com provide daily forex analysis based on Elliott Waves theory. In each Elliott Wave Video five currency pairs are researched. Forex forecast is produced using Elliott Wave count techniques. The forecast is done by Muhammad Azeem, who works in Forex technical analysis since 2001 and practices Elliott Wave techniques since 2005.
