Binary Options trading: Elliot Waves theory

There are many binary options training academies which provide traders binary options trading tips, helps them with strategies and also helps them to use corrective waves as a part of technical analysis on where to place trades. To make successful trades it is imperative that traders should be able to analyze and forecast the market on the basis of these corrective waves and the theories that are associated with them. One of the most popular theories of binary options that relate to corrective waves is known as Elliott Waves Theory. Let’s explore this a little bit more in-depth with this article of Secured Options.

What is Elliott Waves Theory?

This theory is more of a psychological theory which is applied to how investment markets reacts.

It is described as a detailed analysis of how groups of traders will react to a particular situation. This theory tries to make clear the psychology of traders. Elliot Waves theory claims that this is a natural, quantifiable and somewhat forecast able sequence. These competitive patterns were then broken down into waves.

Elliot wave theory takes a glance at a basic five wave structure that must be corrected with the series of three wave moves. The impulse or motive waves, which are the five wave structure, are then met by three corrective waves.

According to this Elliot’s theory, the market needs to be divided into parts what are called cycles and super-cycles; when traders do this the waves are easier to count.

The five impulse moves will always be in the same direction and the three counter or corrective waves will always be in the opposite directions. Zigzags, flats, and triangles generally form the most common corrective waves. During complex or difficult corrections it is not rare to see doubles or even triples of these common wave pattern form.

This is one of the most used and important theory of Binary options trading. Traders can make the most out of every trade they place in Binary options by using one of the most important Binary options trading tips.

Sponsor Ads

• Ad Space Available - Rent it Now!

Report this Page

Created on Dec 31st 1969 18:00. Viewed 0 times.

Share on APSense

Comments