The Wave Pattern
Elliott's main discovery was that market behavior could be identified and measured through a repeating eight wave sequence, consisting of 5 waves that he called "impulsive," followed by a 3-wave "corrective" sequence.  Impulse waves are labeled numerically 1 through 5, corrective waves are labeled A, B and C, as per the following example:

Of the many market sayings thrown around by traders, perhaps none is more overused and less understood than the old adage 'the trend is your friend'. All too often, the phrase is used after a trader has taken a counter-trend position and subsequently been stopped out at a loss. Remorse sets in at this point and most traders kick themselves not only for having lost on a counter-trend trade, but also for not having caught the latest move in the trend itself.

Although many of my previous articles pointed to the act of 'focusing' to some degree, this will be the first time I've written an article that 'focuses' on this very subject. Because of how important I've found this subject to be in my own analysis and trading of the markets, it deserves a bit more consideration than a brief mention within some other topic.

When the discussion turns to the use of Stop Loss orders, you can be confident that a division will occur between all the participants of the discussion, as they are first divided on whether to use stops, and then those who say we should, are therefore divided again on how to use them in everyday trading.

John Murphy, is a very popular author, columnist, and speaker on the subject of Technical Analysis. John's "Ten Laws of Technical Trading" is the best guide available anywhere for people who are new to the field of charting. I urge you to print out this page and refer to it often. If you find this information useful, consider subscribing to John's Market Message Service.

At one of the trading classes I conducted back in 1997 in North Hollywood, I was demonstrating the use of ratios to discover support and resistance price zones via a chart projected on the screen. After having completed several support and resistance lines, one student in the back of the room made an observation not unlike that of others before him. “There are lines everywhere! How can this be useful? How can we know which one is going to contain price on any given move?”

Examples of U.S. economic indicators that are clearly tradable, resulting in immediate price adjustment and trading position profits:

I believe it is fair to say that the great majority of those who enter into trading the markets do so to make money. Regardless of their overall goals, whether it be to make a living from trading or to simply increase their wealth, a trader enters this business for one main reason; to succeed at it.

STANDARD DEVIATION ON REVERSAL DATES When dealing with reversal dates in market analysis and trading, we have come to accept that a standard deviation of one price bar is to be expected in order to accurately locate the swing associated with the date. The cycles combined to form market patterns are the result of external forces, some identified and some not. These forces, which are also part in parcel responsible for weather and tides in our oceans, do not stop cycling when the markets close.

The stock market has traditionally received the lion’s share of attention in the trading industry, but foreign currency (Forex) trading has surged in recent years. Inter-bank forex market, also called Over the Counter Forex – OTC market and Spot market, is world’s largest market, its daily turnover is over 1.5 trillion US Dollars daily, even greater than all other trading markets put together.