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forex currency market Article:

Short Introduction To Elliot Waves As A Resource In Forex
By Adrian Pablo, Thu Dec 8th

The Forex market has thelargest volume of trades per day among all the capital marketsyou can trade. This characteristic together with it's highleverage and around the clock trading schedule makes Forex veryattractive for traders around the world.

Once you enter the world of forex trading you will realize thatthis market has strong trends that seem to follow a repetitivepattern in all the different time frames you can use to analyzethe market conditions.

Ralph Nelson Elliot also observed this and after analyzing agreat number of charts he discovered in the late 1920's that themarkets move in a repetitive manner that is far away from beinga totally chaotic behavior. The markets move in cycles and theyreflect the mass psychology of the active elements participatingin them, with a characteristic ebb and flow that can be dividedand analyzed as "waves" of this active elements psychology intheir daily dealing with the markets.

But Elliot not only discovered the repetitive nature of themarkets cycles but he also realized that this patterns

had afractal nature. This means that the patterns not only repeatedwith time but that in a given period of time the characteristicwave pattern would repeat at different scales (days, hours,minutes).

The Elliot wave pattern can be divided in five constitutivewaves with the first of the waves called the impulsive wave. Thefractal nature if this waves was evident to Elliot when heobserved that in every impulsive wave, when observed at asmaller time scale he would find the characteristic five wavesof the pattern he had found and if he now looked at theimpulsive wave of the smaller impulsive waves in an even smallerscale he would find again five ways, etc.

Elliot waves are very important in Forex because he identifiedthe specific patterns that you can observe when trading thismarket and considering the repetitive nature of this patternsyou can make a pretty accurate forecast of what the markets willdo next. Giving you a huge advantage in your daily encounterswith the currency markets.

About the author:Adrian Pablo is a freelance writer with articles published in anumber of places. Get a free report on Fibonacci Trading andlearn more about the world of trading , visit:


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