Basic principles of Elliott Wave

From 1981 to 1986, Tom Joseph razratal software "Advanced GET" - the world's first and only targeted software for the analysis of Elliott Waves, originally for their own trade. It was presented to the public in 1986. Since that time, he continued to pursue his studies, which have significantly contributed to the further development of the software, adding many new tools for analysis. Currently, "Advanced GET" is the active traders in more than 80 countries around the world. Since 2000, "Advanced GET" is also included in the package "eSignal" and is available as an additional service "eSignal", starting with version 7.1.

During his career, Tom held seminars for traders to trade on Elliott waves using "Advanced GET". He himself, being an active trader, is of great confidence in the training of trade, which he proposes for these seminars. Tom has always promoted its slogan "traders helping traders." "Many of my unique research and tools have been developed as a result of my real deals," said Tom. Tom has written a guide to Elliott Wave Analysis using the "Advanced GET", entitled "Practical application of a mechanical trading system using simplified Elliott Wave analysis and guidance for beginners called" Basics of Elliott waves. Although I use several trading techniques, one of the most preferred - this is one of the options to use Elliott wave - Elliott Type One and selling ", which is to enter the market after the completion of the restoration of Waves 4. I think trade is the method of "Type A" is the most easily identifiable in the model of Elliott wave sequence. And over the years I have developed tools and indicators that allow you to implement this trade with a high degree of accuracy. Using Elliott wave analysis can be obtained from multiple signals. Some of them become clear only after the fact. This can be good if you write a newsletter, which explains the events after the fact, but for a successful trade, you need a model that you can identify in advance with a high degree of accuracy. From my experience of trading in 1979, a model of Type A can be identified with a high degree of accuracy prior to its actual occurrence. After a long wave 3 rally starts fixing of profit and the market enters a phase of recovery. While fixing the profit continues, other market participants who believe that the trend is still in force, continue to enter the market. As soon as the pressure of a fixed profit over, new players entering the market, finally pushed the market to a new peak in Wave 5. One of the simplest tools that we developed in the "Advanced GET" - Elliott Oscillator. We found that the oscillator returns to the zero line, at least in 94 per cent of cases during this recovery, with a fixed profit. This is an excellent tool because it allows you to stand aside until the fixing of profit. When the Oscillator Elliott recedes to zero, this provides a very precise area where you can predict that the fixation of the profit actually finished, and the trend is ready to resume.

In addition to this, we created a fixed profit index (PTI), which is designed for use with oscillators Elliott, and measures the intensity of a fixed income. PTI calculates the value of a fixed profit over the previous Wave 3 rally. Historically, if the PTI remains above 35, this indicates the normal fixation of profit, which allows the market to resume its trend to a new peak. PTI less than 35 indicates too great a record profit and decreases the likelihood that will happen rally Waves 5. We also created a waves of Channels 4, which are displayed in three lines on the graph (blue, green and red). During the restoration of Waves 4, we would like to see that prices are kept above the blue or green channels. Based on statistical surveys, it provides a 70 percent chance of a rapid movement to the new maximum.

Let's look at an example.

Figure 1

In the above example shows the daily schedule of "Occidental Petroleum Corp." (OXY). After a big rally in the Wave 3, this action now is in a fixed income. Oscillator Elliott returned to zero, indicating that the fixation of return can be completed. Now, we look at the PTI. In our case, PTI has shown the value 73. Any PTI value more than 35 indicates that the fixation of the profit was not excessive. The price at the time was able to downgrade to stay above the green channel. In this case we have three conditions that give us the confidence to enter the market, and open long positions for trade in the next stage - Rally Waves 5:

1. Fixing profits ceased (Oscillator Elliott recedes to zero)
2. Fixing an organized way of profits compared with historical patterns (as indicated by PTI remaining above 35)
3. Prices remain above the green channel.

In the "Advanced GET" also developed a tool called the "Pan or missing" (MOB). MOB is activated from the maximum of Waves 3 and provides a potential target for the coming rally Waves 5. The design is very important because it allows you to calculate your potential returns compared to the initial risk taken. The ratio of risk to return must be greater than 2, to be able to conclude a deal.

Ellipse is a tool for Price and Time, which ensures the right time and price to the end of Wave 4. Typically, we look for the Ellipse to provide support for time and for the price. In the case of graphics OXY, tested support for the restoration of the ellipse, and kept verywell