The next near-term support area for SPDR S&P 500 ETF Trust (SPY)—a good area for writing c...
Advanced Elliott Wave and Fibonacci Strategies of a Professional FX Trader
02/17/2008 12:00 am EST
Todd Gordon, currency strategist and active trader, Forex.com gave traders a brief primer on using Elliott Wave and Fibonacci numbers to improve their trading results.
The most important thing a trader can do is to control his emotions, Gordon told attendees. He added that you must understand that you can only take what the market will give you, and most of the time, don't try to fight the market.
The most important question to ask yourself-is today likely to be a trend or a range? That will set up your trading for the day and also prepare you to be wrong. And if your analysis is not correct, just stop trading for the day. After all, in financial markets, Gordon said, the opportunity of a lifetime comes around every couple of weeks.
He told traders that forex trading success does not mean executing numerous trades. He only trades once or twice a day, waiting to take advantage of trends.
Profitable trading requires analysis, strategies, and the use of certain indicators, although Gordon stated that as a level trader, he has found that just one indicator-and not an entire screen full of them-often does the job for him.
Gordon took traders through a comprehensive series of trades, demonstrating Elliott Wave Theory. He then discussed market analysis using Fibonacci numbers to confirm Elliott Wave, explaining how to use retracements, extensions, and projections.
Stop losses are a necessity, Gordon said, and he showed traders how to use them to their maximum advantage, as well as how and when to book profits on a variety of trades.
He explained how to recognize trend triggers and lastly, how to use trend fades, occasional circumstances in which a trader may find profits in fighting the trend.
As Gordon demonstrated, a disciplined approach, using these two strategies, plus keeping your emotions away from the trades, will go a long way in building a winning trading hand.
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