# Wave Tendencies

### Video Transcription:

Hello, traders. Welcome to the Elliott Wave Theory course, and the fourth module, Guidelines of the Elliott Wave Sequence. In this lesson, we’re going to talk about wave tendencies. And now that we are wrapping up with this course, I would like to put some emphasis into what we have learned so far. And then on the next lesson, we’ll do a live analysis using the Elliott Wave Theory on the Euro/U.S. dollar. But for now, let’s take about wave tendencies and what we have learned with them using the EWC. The wave tendencies discussed on this course are not to be taken as rule of price action, but more as a guideline to improve your technical analysis.

Now it should come easy for you to not only examine the time in the market for buy and sell opportunities, but also to correctly take your profits before the impulse runs out. Now this is the basic of the Elliott Wave Theory, and this is why we use it to analyze price action. One, we need a perfectly timed entry. And why we need a perfectly timed entry, because if we perfectly time our entries, we are going to get the risk to reward ratio that we deserve meaning that our risk is going to be lessened by the accuracy of our entry, because our stocks are going to be tighter. And our profit is going to be bigger, because our entry is going to be better. So we are going to perfectly time the market for entries, and we are going to take profit once the impulse runs out. And this is why we are going to use it or use the Elliott Wave Theory to analyze price action.

With the Elliott Wave Course, we determine and try to predict price tendency in the near future. Well, this is what the Elliott Wave course is teaching us or what we have learned with this course so far. But the Elliott Wave Theory is going to help us to determine and try to predict price action in the near future or where is price likely to change. When we correctly assess that we are in a basic formation, finalizing wave four for example, we are going to look for that and of wave four using the principles to ride wave five into profits. This means that we are going to use the guidelines of the Elliott Wave Theory not only to determine where price action is going to go, but we are going to use it to determine our entry or buy zone, in this case, if we are in a bullish five-wave basic pattern. And we are looking at why price action is finishing the corrective wave four before starting wave five as predicted. And you already know where those entries might be and where those exits are going to be.

All of these guidelines come with strict rules that will help us know when we are in a true count and when the count has failed and the structure didn’t hold. And of course you have to remember that there are exceptions to the guidelines, but without them, market analysis would be an exact science and not a game of probability and everybody would make money in the financial markets, which is not the case. Only very few traders make money in the long run and make this a career. And you can be one of them using the analysis tools that we teach here at investoo.com.

With the knowledge you have gathered in this course, you can be quite confident on your wave count and using it to confirm or predict future price action. Now this is what the basic Elliott Wave Theory is going to do for us. This is where the Elliot Wave Theory excels and where you will get the edge to beat the financial markets at its own game.