Market Position
Elliott wave patterns will frequently provide a clear indication of the
position of the market within the trend or counter-trend and what activity
should follow to complete the trend or counter-trend pattern. Having a
confident idea of trend direction, the position of the market within the
trend and the likely activity that should unfold prior to the termination
of the current trend signals to the trader which side of the market to trade,
short or long. There can be no more valuable information.
Trend or Counter Trend?
The most important piece of knowledge a trader can have is a confident
idea of trend direction. Elliott’s work is very helpful in this regard, as
Elliott wave patterns each relate to trend or counter-trend. Trends unfold
in five waves. Counter-trends usually unfold in three waves or a series of
three waves.
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