Type 1 Trades
Used for buying at the end of a fourth-wave retracement
Rules:
Wait for the Elliott Oscillator to pull back to zero. Historically, this happens 94% of the time in wave four retracements.
Make sure the Profit-Taking Index (PTI) is greater than 35. A PTI greater than 35 indicates a good possibility of new highs in wave five.
When prices break the channel, buy the market for a wave five rally
Type 2 Trades
Used for selling at the end of a fifth-wave rally
Rules:
When wave five makes new highs, make sure the Elliott Oscillator shows divergence with its wave three peak. 94% of the time, this oscillator should pull back to zero in wave four.
When five waves are complete, the market changes trend. Wait for the price to cross the channels and sell the market.
The initial target is the previous wave four.
