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There are many different trading strategies that successful forex traders can take advantage of in order to increase their account balance over time, and one popular strategy that can be used in nearly every market is called the Elliot wave principle. This type of currency trading strategy is purely technical and is based directly on the price action on the chart and the way that the price will move over time. Elliot waves can be easy to spot and identify on the price chart of a particular currency pair, and it can give you a predictable model for calculating where you should enter the market and where you should exit the market. One of the most interesting principles about Elliot wave patterns on price charts is that nearly all markets and currency pairs will have price action that unfolds into these types of waves, making a very versatile tool that every forex trader should have in their arsenal. Unlike other popular forex trading strategies based on technical analysis, the Elliot wave principle is not based on a particular indicator and instead is based on the visual representation of the price data itself. This makes this particular trading strategy similar to trading based on candlestick formations or Fibonacci retracement levels, and each Elliot wave formation has five major price points in which the market moves up and down in a pattern that resembles a wave. A forex trader that has enough experience working with price charts should be able to look directly at the price data and be able to identify exactly when an Elliot wave formation is beginning to unfold based on the first two or three price point retracement levels, and knowing this information it is possible to have both a bullish trading signal and a bearish trading signal based on where the next points will be mapped out. This means that applying the Elliot wave principle to online forex trading can be more useful than using it in the stock market since it is just as easy to either buy or sell a particular currency pair. No matter which currency pairs you are focusing on with your trading, all markets tend to adhere to the Elliot wave principle because it is simply based on the way that the price action moves up and down. By incorporating Elliot wave analysis into your forex trading it can allow you to spot potential trading opportunities by mapping out where the price is likely to move in the future. Algorithmic forex trading is one of the opportunites today that can allow retail traders working from home to have access to institutional level trading tools when trading the forex interbank market.
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