Elliot Waves free learning course – Lesson 1

In this small course we will teach you and give you full information about Elliot Waves and how we can apply them in our treading through a small course consists of five lessons … we hope to find good and useful information from our new course and promise that we will support you with new free courses about many things in the world of Forex.

Lesson 1 : What is Elliott Wave and what is driving waves

In 1920 there was a so-called genius Ralph Nelson , this genius has discovered that there is behavior followed by movement in the market is like a circle entrenched has several steps.

This entrenched circuit constantly repeats, so he has discovered that investors effect of external psychotropic like some channels or newspapers or reports reflected repeatedly on the chart and is the principle of the Dow and this reflection of the upward movement or downward to the market and that movement are on repetitive patterns divided into waves and has been called those remarks, which we spoke in the name of Elliott wave Theory.

Patterns of Five driving waves and the corrective three  

Elliott discovered that movement of the market moves in 8 waves ,  first five waves driving and the last three corrective waves.

Well Let's take a look first at the five driving waves and would be seen as an image more easily in the explanation:

If you're still confused specifically , see it  colored with a note that the color of wave number will be compatible with the color of the wave itself:

Next Explanation is a short one of what happens during each wave. And we will explain on the stocks because the stock is what Elliott used in his analysis, but this does not matter Wave Analysis can be used on currencies, bonds or gold or oil.

Explain of the driving waves

First wave

The stock does it first move up and this often occurs by a small number of people (we will say that the entry of these Class for genuine reasons), for example, because of the cheap price and considered suitable for purchase at this time, making the entry of these few people raise the stock price.

Second wave

At that point, many people who were in the first wave began to feel that the current price is exaggerated so they began to profit-taking, causing the stock price drop. But the price does not drop to the  starting point and then goes after that to complete its upward way.

Third Wave

This is often considered to be most waves strength and tallest. The stock took the attention of many members of the public who want access to buy it and this causes the rise in the stock higher more and more , and this wave often exceed higher than the Special Summit of first wave.

Fourth wave

In this wave people reap profits again and this is because the price of the stock for the traders are overvalued or exaggerated and this wave is often weak and because of this that there are many people usually wait for the stock to fall a little bit to do buy it again.

Fifth wave

At this point, many of the people who enter the stock and this because of hysteria of the continuing rise in prices. Often you find a board of directors or Member Managing Director in the front pages of magazines and newspapers or news programs most watched by investors and traders and people continue to purchase because of the reasons silly at that point the price is very exaggerated and becomes the landing just time because the sellers will begin their tour and they will do ABC and is what will be explained in the next topic, God willing.

To answer this questions regarding this lesson I hope to comment on this article as question type and we send it to your E-mail to help you .  Good Luck

Next lesson: ABC correctivewaves.