Regardless of how strong a long-term market trend is, the market never moves only in the direction of the long-term trend – there are always minor movements against the longterm market trend. These deviations usually don’t last very long and after them the market moves again in the direction of the long-term trend.
The picture above shows a snapshot of a E/U candlestick chart. Although the market shows both upward and downward market movements it can be easily recognized that the long-term market trend is clearly bearish.
Frequent relationships are 25%, 38%, 50%, 61% and 75% (Fibonacci ratios).
Suppose we entered the market short and the market move into our direction and reached the point (1).
However, after that the market starts an upward movement toward point (2). What to do now ? Inexperienced trader would like to close the position, happy to take small profit.
This would be the wrong decision because the market turned back to it’s main direction afterwards….
Just an example but you will meet above situation frequently, the essential question is : When do we decide that our trade has run out of steam and should be exited ?
This is where our strategy come into play. We have used the phenomenon described above as a starting point to develope a complete original and until now the best trading system that combines basic principles of Elliot Wave theory together with well-know properties of Fibonaci rates. The result is amazing, as you will soon find out. It will help us find the best possible time to exit the trade and extract maximum profit from the market !
Tobe continued …… Continue here
Author : Nicolebobbin