Trading Elliott Wave Alerts

The following information is for Market Master customers who have upgraded to Premium access and are receiving the Elliott Wave alerts. Trading Elliott Wave alerts is no guarantee of success.

When trading Elliott Waves, Wave 5 is often the most desirable wave to trade because it will be a strong and long wave similar to Wave 3. With Wave 5, we can often determine the targets using Fibonacci numbers.

Elliott Wave alerts can be both Bullish and Bearish

Bullish EW Wave 5 Alert	Bearish EW Wave 5 Alert

A few things to look for before trading an Elliott Wave alert:

1. Trade the Trend! Begin by determining the overall trend of the market. Our screener gauges this by looking at the % of bullish/bearish chart patterns and EW patterns detected as shown below. There are other ways that traders can use to determine the trend, but these can be considered strong indicators. If the trend is mostly bearish, be wary of taking a long.

Chart Pattern Breakout Trends

Elliot Wave Pattern Trends

1. Is there positive vDelta and Open Interest (OI)? To determine this, click on the token name to view the Currency page

   1. In this example for the bullish EW on DOGE, you might enter this trade because the 15m OI is positive and the vDelta is almost positive.

      
2. Next confirm that the price hasn't already hit most of the targets.

   1. In this example, TP1 has already been hit, and the price is too far from the Stop Loss for this to be a profitable trade. Avoid trading if TP1 is already hit. The price should be fairly close to the Stop Loss

   

   1. In this example, the price is still fairly close to the Stop Loss

   

Elliott Wave alerts differ from Chart Pattern alerts because they don't explicitly list the Stop Loss (SL) and Take Profits, but the SL and TP can be inferred from the charts as follows:

For Bullish wave 5 alerts, the SL will be the end of Wave 4 and is the price at the bottom Support line as shown below. I normally set my TP1 to the 2nd target and TP2 to the 3rd target as shown below.

If the price drops below that pivot point, it means that the wave 5 is invalidated.

For Bearish Wave 5 alerts, the SL will be the end of Wave 4 and is the price at the top Resistance line as shown below. I normally set my TP1 to the 2nd target and TP2 to the 3rd Target as shown below.

If the price breaks above that pivot point, it means that the wave 5 is invalidated.

Now that you know the SL and TP, you can draw your trade, determine the SL % and then decide on your margin and leverage as described in our Risk Management strategy article.

Conclusion: Trading Elliott Waves can be a very powerful strategy, but it does not guarantee 100% win rate. Always use proper Risk Management.