How Do You Make Trading Decisions?

By Elliott Wave International

Every trade begins with a series of decisions.

How do you identify a high-confidence setup? What confirmation should you wait for before entering? Where should your stop-loss go? And what do you do if the market proves you wrong?

In this free 30-minute lesson from Elliott Wave International, Trading Instructor Favio Poci opens up his Elliott Wave Playbook and answers those questions using four real-market examples across Gold, EURGBP, GBPJPY and AUDJPY.

As each setup unfolds, you'll see how he:

• Identifies potential Elliott Wave setups
• Waits for confirmation before entering
• Determines precise entry zones
• Sets stop-loss levels and evaluates risk/reward
• Adapts when price action doesn't go as planned

Perhaps the most valuable lesson: not every setup works as planned. Favio demonstrates that successful trading isn't about being right every time — it's about following a disciplined process for managing opportunities and risk.

Whether you're new to Elliott Wave analysis or looking to sharpen your trading approach, this lesson offers a practical look at how a market veteran applies the Wave Principle in real market conditions.

Watch the free lesson now at elliottwave.com.

How the Wave Principle Improves Trading: It Provides Price Targets

By Elliott Wave International

Technical studies do a good job of illuminating the way for traders, yet they each fall short for one major reason: they limit the scope of a trader’s understanding of current price action and how it relates to the overall picture of a market. Most technical studies simply don’t reveal pertinent information such as the maturity of a trend and a definable price target — but the Wave Principle does.

Here is one way the Wave Principle provides perspective:

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Provides Price Targets

What traditional technical studies simply don’t offer — price targets — the Wave Principle again provides. R.N. Elliott observed that the Fibonacci sequence is the mathematical basis for the Wave Principle. Elliott waves, both impulsive and corrective, often adhere to Fibonacci proportions, as illustrated in the chart below. These price targets allow traders to set profit-taking objectives or identify regions where the next turn in prices will occur.

See 4 more ways the Wave Principle improves trading — plus the kinds of trading opportunities Elliott waves identify and how to use waves to set protective stops — in Elliott Wave International's free Special Report. Create your free account to access Learn How the Wave Principle Can Improve Your Trading.

This article was syndicated by Elliott Wave International and was originally published under the headline When Junk Bond Spreads and Stocks Diverge. EWI is the world's largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.