Trading ASX CFD's Stocks - Elliott Wave, Fibonaaci Analysis
By Peter Mathers

Quite simply, markets move up then have a correction-re-balancing in time and price-and all things being healthy the market trends again then re-balances again by having a correction, a trend then a correction and so on. Of course there are varying degrees of these two actions and they both keep expanding as the market develops and grows. It's up to the trader to be able to recognize the beginning, middle and end of a degree of trend and correction. This perspective comes with practice and experience. However the Trading Levels will help new traders out here.

The Trading Levels are where a market has a very high probability of taking a rest in time and price, or of one degree of trend finishing and another beginning. This is where corrections are likely to occur. It is where the amateurs have realised there is a good trend in play, and will now go in and start buying while the professionals who helped engineer the trend consciously or unconsciously are now selling to the amateurs. Amateurs need to understand that what you see is not what you're going to get but the opposite. Only seeing the positive side of the market is like only understanding half of the story. Few traders have an understanding of the negative side, the corrections. Elliott and many others have done a great job in explaining all these aspects, and they need to be understood, and the sooner the better. The Trading Levels offer a lot of practical help with understanding corrections. For the Elliott Wave and Fibonaaci traders, you will also notice that the five wave structure will occur between the Trading Levels with the fifth normally the first high above a Level. Don't chase this first high above a Level as you need this first high above a Level to settle onto the Trading Level and then trade new highs.

The Trading Levels are psychological areas of support/resistance/accumulation/profit taking and re-balancing. A market moves from one Trading Level to the next and so on, while the distribution depends on the former size of accumulation at a Level. However the market expands in the ratio and the Trading Levels are using the ratio in terms of price, so the price is reflecting the ratio of the market expanding in time and price.

Peter Mathers Director, TradingLounge, has been trading since 1982. He started his professional tradiing with Japanese futures company Hoei & Shoin, who mentored and taught him the Japanese analysis techniques of Candlesticks and Renko. Practical experience of the Elliott Wave Theory followed with Australian company Tradewinds Pty Ltd, specialists in futures trading both in Australia and the USA. In London Peter traded commodities, derivatives and securities with Corporate Services International.

Back in Australia Peter has continued to refine his skills and constantly upgraded his knowledge of all current and well established theories and trading programs and online brokering platforms. The TradingLevels® concept was developed. Peter specialises in shares and CFDs and has been an educator with one of Australia's leading CFD providers.

http://www.TradingLounge.com.au and the TradingLevels Analysis Service have been developed by Peter to meet a growing demand for accessible, sensible education and his TradingLevels®-based analysis.

Peter is author of Trading CFDs in Today's Markets.

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