In part two of a three-part series, Andrew Barnett discusses how to trade the Aussie Dollar using the Elliot Wave Theory.

Now I’d like to start out by saying, you will not successfully trade the Aussie Dollar (or any currency pair) without first knowing the fundamentals. In order to trade with any kind of strategy or system it’s important to understand the fundamentals that drive the market you’re trading first. In saying that, technical chart analysis will determine exactly how you trade and should provide you with your entry and exit points.

The Technicals area of trading can be a total mined field for traders because there are literally thousands of theories and strategies of how to plot a price on a chart. I won’t even begin to list them. I just want to talk about the one technical pattern that I personally use and I believe is used by very professional serious players in the market. I am not saying that this is the Holy Grail, that I can assure you doesn’t exist in trading, but out of all the real professional currency traders I personally know that make a lot of money the Elliot Wave Theory is a big part of how they trade technically.

Before I talk more about the formation of the Elliot Wave Theory and how I recommend you learn it, let me explain a common mistake with new traders who try and learn Technicals.

Because Elliot Wave can be a little complex for new traders to learn, the first reaction is to go for other technical patterns and strategies that are easy to learn. You might say “why not?”. I will give you some inside knowledge right now. The world’s top Currency traders are using techniques and strategies the vast majority of amateur traders are not using because the vast majority of amateur traders are too lazy to spend the time to learn them. That is fact, most new traders are lazy and as a Currency Investor let me assure you that you get what you deserve.

Now I am not saying Elliot Wave is the only strategy that you should learn, but what I am saying is that over the past 8 years I have traded with and learnt from some very wealthy hedge funds traders, private traders, institutional traders, and virtually all of them have based their technical systems around Wave formations. 

The basis of Elliot Wave is that the market moves in 5 Wave formations on all time frames, with Wave 3 and Wave 5 being the biggest impulse waves. If you are a surfer you will know waves come in sets and so do currency prices when you know how to look for them. 

The challenge that you are likely going to face with Elliot Wave trading on the Aussie dollar is that Elliot Wave traders often disagree on what Wave price may be in. So keeping it simple is critical and the only way to learn Elliot Wave Trading is to learn live with a professional that makes money using it and is willing to teach you. That’s going to cost you money yes, but if you are serious about this business you’ll need to invest in your knowledge and the best knowledge is never cheap. Especially when it comes from traders that use Elliot Wave strategies to make their living.

I am serious when I say that trying to learn Elliot Waves from reading a text book or looking up something on the internet will not only likely see you get completely confused it will likely also drain your valuable account before you master it. Take it from me, learn it from someone who has mastered it and is willing to show you live and count the waves for you.

So I have spoken about two key aspects of making money trading the Aussie dollar that are already very obvious to some of you. Take the time to learn about the basic fundamentals and spend the time to learn with a real professional trader who traders the Elliot Wave Theory.

Andrew Barnett, is a professional trader and Co-Founder of LTG GoldRock. On a daily basis he not only “talks the talk” but he actually “walks the walk”, as he guides traders around the world in the live market and advises them on buy and sell directions, as well as trading his own personal account. For more information go to www.LTGGoldRock.com