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How Dejá Vù can help with your trades

Tue, Jan 20 2009, 16:07 GMT
by Forex Journal's Collaborators

The Forex Journal


This article is taken from the Forex Journal (December 2008 issue)

The author, Jim Martens, is the senior currency analyst at Elliott Wave International (EWI). He worked as an analyst with floor brokers before joining EWI in 1993, where he covered commodities and oversaw currency analysis. After a stint with Nexus Capital Ltd., a Soros-affiliated hedge fund, he is back with EWI, covering dollar rates and major cross rates in EWI’s International Currency Outlook.


  • Currency trader Jim Martens explains that knowing the patterns of the Elliott Wave Principle can provide a comfortable sense of déjà vu when trading the currency markets. Using the known market patterns, it is possible to get the sense that you have been here before or have seen this price action before and, therefore, what price action will follow.

A feeling of déjà vu can give you the “creeps,” making you wonder whether your brain is on the fritz or whether you have actually already lived this moment before. But when you notice a pattern repeating on a foreign exchange price chart, that same sense of déjà vu can be comforting rather than chilling.

Technical analysts depend on seeing different patterns, such as head-and-shoulders patterns, on price charts. Elliott wave analysis, which is a form of technical analysis, limits the number of repeating patterns, and those patterns link together to form five-wave and three-wave moves that repeat on multiple time frames. Recognize where the market is located within the repeating pattern, and you can get the sense that you have been here before or have seen this price action before. This feeling of déjà vu might even be pleasing if you have noticed that the market usually reacts in a certain manner after the pattern ends.

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Other article in this issue:

Published on  Tue, Jan 20 2009, 17:12 GMT

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http://www.forexjournal.com/ | editor@forexjournal.com

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This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the authors and the publisher are not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. In commodity trading, as in stock, and mutual fund trading, there can be no assurance of profit. Losses can and do occur. As with any investment, you should carefully consider your suitability to trade and your ability to bear the financial risk of losing your entire investment. It should not be assured that the methods, techniques, or indicators presented in this magazine will be profitable or that they will not result in losses. Past results are not necessarily indicative of future results. Examples in this magazine are for educational purposes only. This is not a solicitation for any order to buy and sell. The information contained herein has been obtained from sources believed to be reliable, but cannot be guaranteed as to accuracy of completeness, and is subject to change without notice. The risk of using any trading method rests with the user.

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