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| Elliott Waves and Fibonacci Ratios for Traders |
When some traders first learn about Elliott Waves, they become confused about the different facets of the overall pattern. And while a study have Elliott Wave speculation often injects a few new terms into a trader's vocabulary, he may find that the overall understanding that comes along with this research permeates into his previous understanding for how the markets basically work.
Elliott Waves are typically defined by impulsive and corrective moves. An impulsive move is a move in the direction of the main trend. A corrective move or wave is typically made counter to the rash move and exemplifies the period of time in the market where it doesn't make a significant move in one direction or another.
Impulsive moves are typically characterized by periods of market movement which are accompanied by explosions in volatility. They can also accompany amounts of time where the market momentum increases too. In this phase of the market, the price bars tend to be longer and a trader may notice more gaps occurring during an reckless move.
A corrective move is related to a time period where the market takes time out from the main trend. Since the market is not moving in one direction or another, traders may tend to experience a higher degree of whipsaw trades in this portion of the Elliott Wave vs an impulsive type move.
When the trader understands the sequence of impulsive and corrective moves which make up a full Elliott Wave sequence, it permits him to easier understand what is presently going on in markets. It also allows him to predict what could happen next based on the prevailing phase of the Elliott Wave that he is in.
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