The Elliott Wave Principle, developed by Ralph Nelson Elliott in 1930s and 40s, is a powerful analytical tool that is still being used for forecasting stock market behavior. The basic concept of this Principle is that stock market prices rise and fall in distinct patterns and that those patterns can be linked together into waves.

Developing a profit strategy and setting a protective stop is inevitable in every investment. Just as protection of capital or the money you invest is important, so also is necessary the protection of your profits for the money earned. In due analysis of the most effective exit systems, it is found that as the price of stock increases, you can move the stop loss higher. And in case of downtrend, the price will trigger the stop and a sell order will be executed.

We all are familiar with the fact that successful traders use Fibonacci and the Golden ratio. Before, we all get ready to try our luck, it is imperative that we know and understand what they are. While Fibonacci numbers and sequence was first known to appear in a book (Liber Abaci ) written by a famous 13th century mathematician Leonardo Fibonacci da Pisa in 1202 as a solution to a problem. The question quoted "How many pairs of rabbits can be generated from a single pair, if each month each mature pair brings forth a new pair, which, from the second month, becomes productive?"

Have you ever heard of a stop placement strategy that trails stop based on previous 'high' points? It is called Chandelier exit as it hangs down from the high point or the ceiling of our trade, just as a chandelier hangs from a room ceiling. The distance, which is usually calculated from the high point to the trailing stop; could also be calculated in dollars or in contract based points. However, the value of this trailing stop moves upward very promptly as higher highs is reached.

Any trading strategy is incomplete without Forex Money Management. It is not only about knowing the ins and outs of which currencies to trade and identify the entry and exit signals, it is also about manage the resources and integrating money management into the trading plan. It is essential for a trader to meticulously position size, margin, recent profits and losses and any contingency plans before foraying into the market.

Developed by J. Welles Wilder Jr., Average Directional Index (ADX) is one of the most trusted ways to evaluate the strength of the current market trend, be it upwards or downwards. Measured in an oscillator that fluctuates between 0 and 100, readings above 60 are considered comparatively rare. While a weak trend is marked for low readings below 20, a strong trend is indicated with high readings above 40, it is important to determine whether the market is trending or trading (moving sideways).

If you are a beginner at Forex trading then you must know that Forex is art and science, and, you have a really good advantage these days because with just a few things they can learn a lot about currency exchange. They also must know that there are many risks involved in these kinds of markets and they must be prepared to lose money and must use the "risk capital" in these foreign exchange markets.

Swing trading is a trade method in the gray area between trend following and day trading. A swing trader holds a stock for a small period of time and then will trade the stock when it's in it intra-week or intra-month oscillation. A experience swing trader will generally choose a large-cap stock because of its broadly defined high and low extremes. The trader will ride the stock wave in one direction for a couple of weeks, only to switch to the opposite side of the trade when their particular stock changes direction. A swing trader is best in position to do this when that market is more on the stable side versus it being a bear or bull market. This is because those markets' momentum generally carry stocks in one direction only (and for a long period of time).

When talking about flag patterns, it probably will remind many traders of wedges and triangles, actually there's no difference among them - they are short-term continuation patterns. For convenience, we'll call all these patterns as flag in the rest of the article. Flag is a sharp, strong rise/fall trend with several bars of sideways price action on much weaker trade followed by a second, sharp move to new highs/lows.