Price Wave Analysis
Welcome to the price wave analysis lecture. This lecture on price wave analysis will help you develop fundamental concepts of technical analysis that are cardinal for your overall development. If you are just starting to learn about price wave analysis, or if you already know the basics, this series will get you going in the right direction. Plus, I will urge you to watch this video if you plan to enroll in our advanced forex trading course.
Price wave analysis is easily applied after it is correctly understood. The main tenet behind price wave analysis is that prices never rise or fall in a straight line. Prices fluctuate up and down in a series of zigzags. It is the main reason why new traders become discouraged. If they are buying they see price falling, or if they are selling, they price rising. So they panic and close their trades. Imagine if this happens to millions of traders through out the world. The fear and greed is manifested in the price wave model. It is amazing how this model works. Although some critics say that the knowledge of the model makes it self-fulfilling, that just makes the model better. It becomes more apparent once you understand price wave structure.
Although rudimentary in its appearance, price wave analysis is the foundation of technical analysis. It is mainly used to discern between bullish, bearish, and choppy trends. Instead of buying because prices are going higher, or selling because prices are going lower, we use the price wave model to objectively mitigate our margin of error. Using price wave analysis is the framework of every strategy imaginable. It all starts here.
In the first lecture, we will break down the price wave model. You will learn about the impulse wave and corrective wave. You will also learn how to determine which trend is current. You will learn about how to recognize reversals and continuations. Also, you will learn how to avoid the mistake of prematurely assuming a resumption or reversal of a trend. These are very basic principles of price wave analysis.
In part 2, we will analyze a real chart and apply the theory to practice. You will see how professional traders determine if the sentiment is bullish, bearish, or neither. Also, we go over how to practice on your own. We recommend free charting software that analyzes the price wave model for you. All you have to do