How Analyzing Forex with Elliott Wave Can Help You Catch Both Rallies and Declines
FreeWeek of Elliott Wave International's Currency Specialty Service is here thru Nov. 18
November 12, 2010

By Elliott Wave International

On November 1, the EUR/USD -- the euro-dollar exchange rate and the most actively-traded forex pair -- was trading the $1.38 range, near the level it is today.

But if you look at what the EUR/USD did between November 1 and 9, you'll see a huge 400-point (or pip, in forex lingo) rally into the November 4 top -- and an equally huge decline back to the levels we see today.

That's an 800-pip "round trip" in just six trading days -- a huge move which obviously caught a lot of the U.S. dollar bears and bulls by surprise. Could you have seen it coming?

If you know how to analyze currencies with Elliott wave, the answer is probably "yes." Wave analysis helps you identify patterns in market charts and tells you how those patterns -- ideally -- should develop. In other words, Elliott allows you to narrow down multiple possibilities to a handful of probabilities.

A probability is never a certainty. But it's better than a shot in the dark, as this example demonstrates.

On November 1, Elliott Wave International's Currency Specialty Service posted the following end-of-day forecast. (Some Elliott wave labels removed for this article):

[Higher, into a top] The euro is poised to thrust above 1.4160. The question is if the thrust takes place before the FOMC announcement and ends afterward, or starts in response to the announcement. Before or after, the euro should hit new highs.

What gave Currency Specialty Service the confidence to make that forecast? It was the "contracting triangle" pattern you see in the chart above. They often appear in 4th waves, right before the market's final push in wave 5. The EUR fulfilled the forecast with a 400-pip rally into the November 4 top. The following day, our Currency Specialty Service wrote:

The euro is reversing course after a thrust from a triangle. The decline from 1.4283 might not be in five waves, but it has the characteristics of an impulsive wave. A correction of the rally from August should reach the 1.3636-1.3700 area, the 38.2% retracement of the advance...

...which brings us to the price levels where we find the EUR/USD today. And if you're curious to know what Currency Specialty Service has to say now, you have a great opportunity:

FreeWeek is live through noon EST on Thursday, November 18! You can access all the intraday, daily, weekly and monthly forecasts from EWI's Currency Specialty Service right now through noon Eastern time Thursday, Nov. 18. This service is valued at $494/month, but you can get it free! Click here to access Currency Specialty Service FreeWeek.

Our friends at Elliott Wave International have just announced the beginning of their popular FreeWeek event, where they throw open the doors for you to test-drive some of their most popular premium services -- at ZERO cost to you.

You can access all the intraday, daily, weekly and monthly forecasts from EWI's Currency Specialty Service right now through noon Eastern time Thursday, Nov. 18. This service is valued at $494/month, but you can get it free for one week only!
It's an exciting time in the Forex world. Since the high in early November, the Euro has declined sharply against the U.S. Dollar. Does this mean that a top is in place? Find out during EWI's Forex FreeWeek -- on right now!

Learn more and get instant access to EWI's FreeWeek of FOREX analysis and forecasts now -- before the opportunity ends for good. Click here!

Interesting when you consider the correlation with currencies!

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The Next Major Disaster Developing for Bond Holders
(excerpt)

The Elliott Wave Theorist -- October 2010
(By Robert Prechter, EWI president)

...History shows that investors have been attracted like moths to a flame to four consecutive pyres: the NASDAQ in 2000, real estate in 2006, the blue chips in 2007 and commodities in 2008. Now they are flitting across the veranda to a mesmerizing blue flame: high yield bonds. Bonds pay high yields when the issuers are in deep trouble and cannot otherwise attract investment capital. The public is chasing a large return on capital without considering return of it. ...

The Elliott Wave Financial Forecast -- October 2010
(By Steve Hochberg and Pete Kendall)

The rise in optimism since early 2009 has allowed corporations to issue the lowest grade debt at a record rate, even more than in the middle of the incredible expanding debt bubble of the mid-2000s. The annual total of $189.9 billion to date is a record, and the entire fourth quarter still lies ahead.

This is a stunning testimony to just how desperate investors are for the returns they grew so accustomed to during the old bull market. The Moody’s BAA-to-Treasury spread (see chart in the free report -- Ed.) has been widening since [April] and has made a series of lower highs in August and again in September. This behavior reveals an emerging preference for perceived safer debt even as junk bond issuance races higher. It is a critical non-confirmation...

Read the rest of this important report online now, free! Here's what else you'll learn:

• How Investors Are Looking Past Red Flags in Muni Market
• What You Should Know About Today's "High-Grade" Bonds
• The Answer To Bond Selection
• MORE
  

"Market Manipulation" Is Not Why Most Traders Lose
A look at EWI president Robert Prechter's requirements for successful trading
By Elliott Wave International

How often have you heard analysts refer to a down day on Wall Street as "traders taking profits"? Sounds great, but the sobering fact is that most traders -- in futures, commodities, or forex -- lose money. Yet some traders do win; some even set records. In 1984, Elliott Wave International's president Robert Prechter won the U.S. Trading Championship, setting a new all-time profit record of 444.4% in a monitored real-money options account. Here is a link to the free report where he lays out his requirements for successful trading. Read more.

Interesting!

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The Fed and "Plunge Protection Team": Are They Manipulating Stocks?
Rumors are, the U.S. government "is propping up the stock market."
October 29, 2010

By Elliott Wave International

Out of thousands of questions recently submitted to us at Elliott Wave International, the most frequent one received is: "Can the Fed manipulate the stock market?" Read our expert's answer on this and other misleading “investment wisdom.” Read more.

You will find many intriguing Q&As at EWI's Message Board. We offer it as a free way for our Club EWI members and subscribers to interact with EWI and the Socionomics Institute's experts. We strive to answer every Message Board reader, and publicly post the best Q&As.
By far, the most frequent question we've been asked recently is:

"What is your take on the persistent internet chatter that the Federal Reserve is holding up the stock market via QE2, POMO, etc.? How can stocks ever decline again if the Fed is in control?"

We have several active Message Board posts that touch on "market manipulation." But here is an eye-opening chart that will help shed more light on this issue.

EWI President Robert Prechter published this chart in his October 2008 Elliott Wave Theorist. Review this chart carefully. For too many investors, the crash of 2007-2009 is becoming a hazy memory. And almost no one in the mainstream financial media talks about the utter panic in the markets in September-October 2008, the worst part of the crash.

If you think back to that time, you may remember that the Federal Reserve and U.S. government took many aggressive steps to help stop the collapse. Every time they would announce a new intervention, the market would cheer. Result? Prechter's chart gives an unequivocal answer:

As you can see, announcements of bailouts, unlimited credit, bans on short sales, etc., were powerless against the biggest stock market collapse in 76 years. The DJIA kept sliding. It didn't stop until March 6, 2009 -- after it had slipped below 6,500.

So: Is the Fed and the "Plunge Protection Team" engaged in market manipulation? You can browse EWI's Message Board for some answers, but one thing is clear: When stocks were crashing two years ago, few dared to suggest that the Fed was in the saddle. Bob Prechter puts it best:

"When markets go up, the Fed seems to be in control; when they go down, it seems out of control. But the control aspect is an illusion."

Get the 33-page Market Myths Exposed eBook for FREE
Learn why you should think independently rather than relying on misleading investment commentary and advice that passes as common wisdom. Just like the myth that government intervention can stop a stock market crash, Market Myths Exposed uncovers other important myths about diversifying your portfolio, the safety of your bank deposits, earnings reports, inflation and deflation, and more! Protect your financial future and change the way you view your investments forever! Learn more, and get your free eBook here.

PDF is the popular file format for the electronic books (or e-books) and Forex traders always search for Forex PDF to read about the currency trading from their own PC without having to buy a physical book or installing some additional software for e-book reading. Of course, there are many strictly proprietary e-books that aren’t available in PDF format, but there are also free e-books that allow reading about Forex in PDF format.

There are several sources of the Forex PDF books on-line. Some of them are great and feature tens of interesting and useful e-books; others aren’t that cool but still allow downloading one or two free Forex PDF books:

• Forex E-Books from EarnForex.com list more than 70 free PDF e-books that can be freely downloaded. All the books are divided into 6 thematic categories.


• Trading Naked Library — the site isn’t too visitor-friendly but it has ton of Forex PDF and other financial trading e-books.


• Phildun’s Forex Trading Library is a great source of free Forex PDF books but it lists them without descriptions and the download process isn’t very easy from this website.


• The Forex Village has four categories of free Forex PDF books with a lot of rather rare strategy descriptions.


• FX1618 lists a lot of interesting e-books but, unfortunately, only few of them are about the actual Forex trading.


• Forex-Book.org — the majority of the listed books are paid but there are also several free ones there (not too great).


• Forex Newbies Library - 9 carefully picked newbie-friendly Forex PDF books. Nice choice if you don't want to spend a lot of time to go through the dozens of them to find what you really need.

When you set yourself into a Forex trading, it’s very important to have a good level of knowledge in the markets. Downloading and reading at least some of these e-books can be a good start before your open your real money account and buy some real books on trading.

If you know some other good on-line sources of free Forex PDF e-books, please, feel free to mention them in the comments.

Update: One more source added.