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Advanced Technical Tools
Fibonacci, Elliott, Gann, and More
Introduction
Track ‘n Trade
High Finance has incorporated concepts and theories from leading
technical and fundamental educators in the industry allowing you as a
trader to apply their studies easily to your trading. In this section
you will learn basics about their theory and how to apply it in Track ‘n
Trade High Finance using the Advanced Technicals Expansion Pack. If you
do not have these features in the software, you can purchase them online
at www.trackntrade.com
Elliott Wave Tool
To identify an Elliott Wave on a chart, select the Elliott Wave tool
from your Advanced Charting toolbar. Click on the first point to place.
Continue throughout the wave by clicking on each point 1-5 and ABC to
place. When you get to the last point, C, the drawing is complete.
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Elliott
Wave Theory
The
Elliott Wave theory was developed by Ralph Nelson Elliott. He
suggested that the market behavior is based on waves rather than
random timing. He believed that market prices rose and fell in a
series of waves based on the same Golden Ratio or Golden Mean
that Fibonacci proved. |
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Interpretation
The
basic idea of the Elliott Wave theory is that a market rises in
a series of five "waves" (as he called them), and a market
declines in a series of three declines. Elliott’s said the
market rises on the first wave, declines on the second, begins
to rise again on wave three, has a period of decline again on
wave four, and finally completes the rise on wave five. The
period of correction is referred to as a three-wave correction
where the market declines for wave A, begins to rise for wave B,
and falls again for wave C.
Elliott went on to
further explain that a complete market cycle consisted of a 144
wave cycle, broken down into an 89 wave bull cycle, and a 55
wave bear cycle. This is based on his observation of Fibonacci’s
Golden Ratio. The series of numbers Fibonacci describes shows a
relationship of 1:0.618. Elliott further showed that a market
usually rises or falls based on this wave cycle. Each wave in
the cycle has its own characteristics. |
Five
Wave Advance
One: Normally very short and easy to miss.
Two: A retracement wave. Gives back all or most of what the
first one gained.
Three: Usually very prominent. Follows a period of what
appears as a consolidation, most people trade this wave.
Four: Noted to be very intricate, yet still a consolidation.
One of Elliott’s main rules is that in a five-wave advance
cycle, wave four can’t overlap wave one.
Five: Often very active. At some point declines and lead to
the three wave corrective cycle.
Three
Wave Decline
A: Normally seen as a minor pullback of wave five of the
advance cycle.
B: Follows A of the downtrend and is often hard to spot.
Should result in a third wave continuing down.
C: Usually quite significant and many traders see this as a
selling opportunity. The price bars form a perfect
symmetrical triangle shape. |
Resizing the Elliott Wave
Select the drawing by clicking on it. You will know the drawing is
selected when boxes appear at the corners. Click on a box and drag it to
your desired location. Release the mouse button to place.
Moving the Elliott Wave
Select the drawing by clicking on it. Drag to the new location and
release the mouse button to place.
Deleting the Elliott Wave
Select the drawing by clicking on it. Press the Del (Delete) key on your
keyboard. You can also right-click the drawing and select “Delete” from
the dropdown menu.
Preferences
Select the drawing by clicking on it. The properties will appear in the
preferences section of your control panel.
Restore Settings: TNT Default will change your settings back to the
original software settings. My Default will change current settings to
your personalized default settings. Apply To All Charts will apply your
selected settings on all open charts. Save As My Default will save your
current personal settings.
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Elliott Wave: You can choose the color, line style, and
line thickness of your lines.
Font: Select the font, size, and color of the text.
Select Text to hide or show your text on the chart.
Select to Show Arcs on points of the drawing. Select
Snap to have your lines snap to price bars when moved.
Select Always Show Lines to keep lines on your chart even
when the drawing is deselected. |
Example of an Elliott Wave
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