07/03/2011 – Big Advantages of Trading with the Wave Principle

Other tools fall short in this regard. Several trend-following
indicators such as oscillators and sentiment measures have
their strong points, yet they generally fail to reveal the maturity of
a trend. Moreover, these technical approaches to trading are
not as useful in establishing price targets as
the Wave Principle.

Here’s another big advantage of using the Wave Principle in
your trading, which comes directly from the free eBook “How
the Wave Principle Can Improve Your Trading” –

“Technical studies can pick out many trading opportunities,
but the Wave Principle helps traders discern which ones have
the highest probability of being successful.” 

Indeed, this valuable free eBook shows you how to identify
and exploit the market’s price pattern, as shown in the Elliott
wave structure below:

The Wave Principle also helps you to identify price levels
where you may want to place protective stops.

“…although the Wave Principle is highly regarded
as an analytical tool, many traders abandon it when they
trade in real-time — mainly because they don’t think it
provides the defined rules and guidelines of a typical trading
system.

But not so fast — although the Wave Principle isn’t a
trading “system,” its built-in rules do show you
where to place protective stops in real-time trading.”

“How the Wave Principle Can Improve Your Trading”

Before you attempt to identify price levels for protective
or trailing stops, you should first become familiar with these
three rules of the Wave Principle:

• Wave 2 can never retrace more than 100 percent of wave
  1
• Wave 4 may never end in the price territory of wave 1
• Wave 3 may never be the shortest impulse wave of waves
  1, 3, and 5 

The details and specific instructions for placing protective
and trailing stops are in the BONUS section of the free eBook, “How
the Wave Principle Can Improve Your Trading.”