Aim for profit with 3 waves of Elliott wave

Friday, June 23, 2023

beginner day trading income

t f B! P L

 Introducing the Elliott Wave as one of the ways to profit in the market.

If you can understand this, you can grasp the timing of actual trading.

It's a skill that can be learned and will never go out of style, so try it out on a demo account first.

What is ”Wave”?

  • It means that the price does not move in a straight line, but moves up and down in a zigzag like a wave.

What is an uptrend?

Upward waves are strong and downward waves are weak

What is a Downtrend?

Upward waves are weak and downward waves are strong

What is range market?

Upward and downward waves have the same strength

5 rising waves and 3 falling waves appear in candlesticks in their basic form.

Below is an Elliott Wave in an uptrend.

There are no absolutes in exchange, but the following three principles apply.

  • 3 waves of rising rise to 1 wave, 5 waves or more.
  • The end point of wave 2 of the rise cannot be below the start point of wave 1.
  • The end of wave 4 of the ascent cannot be below the end of wave 1.

The reason for aiming for 3 waves is in this principle 1.

  • Once you can recognize wave 1, you can start preparing to “buy” wave 3.
  • You can see the profit margin guideline that it will rise at least this much when the first wave is confirmed.
  • Buy when wave 3 starts and rises to the end of wave 1.
  • A little below the second wave is the loss cut line.

In other words, it is easy to determine the timing to buy, stop loss, and profit margin, so even if the winning rate is 50%, it will be possible to make a profit.

Next, I will explain how to recognize and enter an uptrend (1 rising wave) from a downtrend or range market.

The chart below shows range prices.

Draw a horizontal line at the most recent high of a range-bound market. If the candlestick exceeds that price, is it one wave? and start preparing.

If the 2nd wave in the figure below confirms the 3rd wave without interrupting the horizon, it is an Elliott wave.

Enter buy at the horizontal line (yellow line in the figure below) at the end of wave 1.

It can be predicted that the profit taking position will extend to the same place as the first wave as shown in the figure below.

The loss cut line should be near the purple line in the figure below.

The same is true for downtrends.

First of all, with a demo account, is it one wave? Please try looking for a time axis and currency that you can think of.

Basically, finding this one wave is the first step.

For the first time, let's open the familiar euro to dollar chart.



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A 40-year-old office worker living in Japan. While searching for a way to live in Japan, where taxes and prices are rising, he encounters FX. Before the Lehman Brothers shock, the yen tended to depreciate and he could easily earn money, but he lost all his investment due to the Lehman Brothers shock. Since then, I'm focused on how to survive and make money rather than win or lose.