Again a little about Elliott waves

According to Elliott Wave Theory, there will be 2 types of waves, that are push waves and corrective waves. In which, push waves to include 5 waves (1,2,3,4,5). The corrective wave consists of 3 waves (a, b, c). However, not all correcting waves have a 3-wave structure. According to Elliott, push waves and correcting waves create a cycle at different levels.

Thus, one cycle will have push waves and corrective waves. In an uptrend, for example, there will be 5 push waves and 3 corrective waves. In the first 5-wave structure, waves 2 and 4 show correction, while waves 1, 3, and 5 are bullish. And in contrast to the downtrend. And the extent of each wave has other requirements that make Elliott Wave Theory a complex method of trading if you don't understand them in the first place.

Here are 3 ways to trade with Elliott waves that you can apply to trade.

Trade with the 3rd wave

Wave 3 is the longest wave in the structure of the first 5 waves of the push wave. That means wave 3 must extend above waves 1 and 5, usually 161.8% larger than the other waves. Wave 2 has a retracement of 50% to 61.8% of the first wave.
Such conditions will give you a perfect deal. Just wait to buy on the 50% to 61.8% correction of the first wave. The expected take profit level is 161.8% since wave 2 ends, and the stop loss below wave 1 should be fine. As shown above.

Trading in a sideways pattern

In corrective waves, sideways patterns are often formed. These patterns all have one thing in common: wave b must retrace at least 61.8% compared to wave a before. That way we can also trade.

We only need to watch long for wave b, take profit at the 61.8% correction of wave a. Take profit below the starting point of wave b.
If a correcting wave is not attractive, it will not return to 61.8% but it can go.

Trading at wave 5

One of the most powerful rules in Elliott wave theory is that wave 1 is not equal to wave 5. This can help traders to predict wave 5 somewhat. Traders only need to measure the length of wave 1 and predict the end. Result from the end of wave 4, wave 5 starts until it ends.

However, not always. We just need to find wave 5 with the length of 61.8% of wave 1. When this is possible, you just open a short position and aim at 38.2% of all 5 waves in the push wave. As shown below: