In this post I will show you how I use MACD Indicator to count Elliott Wave, this method is very useful and easy to apply, especially when the price starts moving in a new trend. And why I say it is useful and valuable ? Because when you can predict the price movement, you would know where the price will probably head and where it will potentially stop, this helps trader with many opportunities to be profitable.
The screenshot below is the EURAUD 4H I took just now , as of May 9th 2013, you can see the price has breaked the downtrend.
- The peak of MACD wave is usually the 3rd wave of price in Elliott Wave Theory ( I assumed you already know the basic of Elliott Wave, if not, I will send you free ebook to learn about this, click Subscribe to be notified when it is available )
- When MACD gets close by zero, it indicates the retracement waves (wave 2 and wave 4) are completed.
- Divergence between price and MACD in the last wave usually show wave 5 is running out of fuel and it is the end of whole 1-2-3-4-5 wave.
Here is the chart how I count the Wave.
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