Trade with an edge using Elliott Wave Analysis

Elliott Wave Analysis is a dynamic tool. We should not use it as a simple forecasting tool, rather as something which will guide our trading decisions. We should look at our charts, and make up our mind as to what is the most likely scenario. Then we sit and wait. If things don’t unfold as planned, we wait for more clues and take new decisions. EWP helps us at every stage. Take my comments on the NIFTY index yesterday. I pointed out a potential triangle formation. Just so that newbies don’t miss it, I added in clear words on the relevant chart that the formation could simply vanish tomorrow. We should never be surprised or disappointed if something like this happens. That is the very nature of the market, to take an unexpected turn! However, like a well trained dog, it usually comes back on track after the detour! In the meantime, we should not panic. Our goal is clear. To make money by taking low risks. While we wait for such a set up on the buy side, there are some interesting “Sell” candidates. I mentioned Larsen and Tubro a few days back. Today present you with Bajaj Auto. Bear in mind that these are short term plays.As always, you need to protect yourself with suitable stops. For example, Bajaj Auto could go as high as 1535, so you should also know where a good stop should be, and how you should build a short position. Trading is not the same as analysing charts. The winner is one who knows the art of money management. Even if you are not a master of ELliott Wave Analysis (to tell you the truth, no one is!), it doesn’t matter. Become a master of money management first. Simultaneously learn EWP. Good luck.