Transcription
3 WAYS TO PROFITUSING IMPULSIVE AND CORRECTIVE WAVESExclusive Cheat SheetOne of the most overlooked aspects of trading is learning to "read" the ebb and flow.Said another way, the key to consistent profits is understanding and abiding by thelaws of impulsive and corrective waves.But here's the deal.Among the myriad of Elliott Wave principles and rules, there are but a handful ofuseful concepts for the traditional price action trader.So I've done the hard work for you and boiled it down to three easy to understand yetuseful ways to trade using impulsive and corrective waves.Be sure to visit sons/impulsivecorrective-waves to read the full lesson.
IMPULSIVE VS CORRECTIVEThe very first step to using impulsive and corrective moves (or waves) to youradvantage is understanding how to differentiate between the two.The illustrations below should help.Bullish TrendImpulsive moves are defined bylarge bullish candles thattypically close near sessionhighsCorrective moves are identifiedby smaller candles and generallydrift lower without muchconvictionThe most profitable buy signalsare found at the end ofcorrective moves and at the verybeginning of impulsive movesBearish TrendImpulsive moves are defined bylarge bearish candles thattypically close near sessionlowsCorrective moves are identifiedby smaller candles and generallydrift higher without muchconvictionThe most profitable sell signalsare found at the end ofcorrective moves and at the verybeginning of impulsive moves
1INTERMEDIARY PRICE ACTION SIGNALSNow that you know how to differentiate between impulsive moves and correctiveones, it's time to begin looking for buy and sell signals.In it's most basic form, the pin bar represents a rejection of an area of value (supportor resistance). But the very best signals appear at the end of corrective moves.Bullish Signal4 keys to success.Strong bullish trend makinghigher highs and higher lowsCorrective move lower (typicallyinvolves smaller candles)Key support levelA well-formed bullish pin barwith a tail that is at least twothirds of the entire candleBearish Signal4 keys to success.Strong bearish trend makinglower highs and lower lowsCorrective move higher (typicallyinvolves smaller candles)Key resistance levelA well-formed bearish pin barwith a tail that is at least twothirds of the entire candle
For more on how to trade pin bars, visit the following /pin-bar-quality2CORRECTIVE WAVES AS CONTINUATION PATTERNSYou just discovered the most favorable placement for the pin bar as an intermediaryprice action signal.Now for my favorite way to utilize corrective waves to catch big moves.Bullish Continuation PatternBearish Continuation Pattern
4 keys to success.Strong bullish trend makinghigher highs and higher lowsCorrective move lower (typicallyinvolves smaller candles)A well formed bullish flag orwedge patternA daily or 4-hour close aboveresistance4 keys to success.Strong bearish trend makinglower highs and lower lowsCorrective move higher (typicallyinvolves smaller candles)A well-formed bearish flag orwedge patternA daily or 4-hour close belowsupportFor more on how to trade bullish and bearish flags as well as wedge patterns, visit thefollowing ow32CORRECTIVE WAVESAS CONTINUATIONTRANSITIONALREVERSALPATTERNS PATTERNSLast but not least are transitional reversal patterns. As the name implies, these pricestructures represent a transition from an uptrend to a downtrend or vice versa.While there are other reversal patterns out there, the head and shoulders is by far myfavorite to trade.
Bullish Reversal Pattern3 keys to success.The "head" must besubstantially lower than bothshouldersLeft and right shoulders must beon the same horizontal planeA daily or 4-hour close aboveneckline resistanceBearish Reversal Pattern3 keys to success.The "head" must besubstantially higher than bothshouldersLeft and right shoulders must beon the same horizontal planeA daily or 4-hour close belowneckline supportFor more on how to trade the head and shoulders and inverse head and shoulders,visit the links bjectives
sons/3-forex-chart-patterns-youneed-to-knowAnd now for a few examples of real-life reversal cad-inverse-head-shoulders-pattern-stillplayHERE'S WHAT TO DO NEXT123Send me a message to mypersonal email addressdailypriceaction@gmail.comto let me know what you thinkof the cheat sheet you justread.Follow me on Twitterwhere I share helpful contenton Forex price action trading,including lessons, articles anddaily commentary.Review the cheat sheet aboveas many times as necessaryand be sure to reach out withany questions or feedback.Well done!
with-this-forex-entry-strategy. CORRECTIVEAWAVESRAS CONTINUATION PATTERNS 32 TRANSITIONL REVESALPATERNS Last but not least are transitional reversal patterns. As the name implies, these price structures represent a transition from an uptrend to a downtrend or vice versa. While there are other reversal patterns out there, the head and shoulders is by far my favorite to trade.
