Book preview of our trading

e-guide with a total of 581 pages

360 Degree Method for

Trading and Analysing Price
Patterns & Market Structure
Master Technical Analysis and Price Charts
in the Forex and Financial Markets

​ BA, MSC
Written by Chris Svorcik, M
For www.EliteCurrenSea.com
Published in 2020 as an online guide.

Copyright © 2019, 2020 by Elite CurrenSea.

Elite CurrenSea has asserted his right to be identified as the author of this work.

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system,
or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or
otherwise, without the prior permission of the copyright owner.

First Edition: September 2019.

Second Edition: April 2020.
Summary
This 600 page e-guide focuses on understanding technical analysis and price charts in general.
The guide reviews all of the key concepts from A to Z such as support & resistance, price
patterns, and trend & momentum. The main focus is on the Forex market, but the ideas could
apply to most price charts. We believe that traders with various experience levels - from
beginners to intermediate to more experienced - are able to benefit from the guide.

The ecs.SWAT guide explains how traders can analyse and understand price movements with
more context and in a quicker way. It discusses both ​manual trading​ via Chris Svorcik’s SWAT
methods and ​automated trading ​via Mislav Nikolic’s Ultima EA.

It is mostly focused on practical solutions (98%). We explain how to identify impulsive and
corrective price swings, how to spot chart patterns, the trend direction, and S&R. Candles and
price swings are like pieces of Lego as they build up to something larger. Simply said, we show
traders how to recognise patterns and trade them.

But we also show some theory (2%). We explain how patterns repeat throughout time, with all
instruments, and on all time frames because the market is fractal in nature.

We hope that the material here makes the reader a better chart analyst and a better trader.
Even if the materials help improve your skills with 10%, it is already a success. But secretly, we
hope that you gain much more out of the ecs.SWAT guide.

Summary of Contents
Chapter 1: ​Introduction

Chapter 2: Our View on Fundamentals

Chapter 3: Price Action and the Path of Least Resistance

Chapter 4: Support & Resistance

Chapter 5: Patterns and Triangle of Analysis

Chapter 6: Making a Coherent Analysis

Chapter 7: SWAT Method and Moving Averages

Chapter 8: SWAT Method from A to Z

Chapter 9: Ultima: Automated Trading System

Chapter 10: Decision Zones and Triggers

Chapter 11: Deeper Market Thoughts

Chapter 12: Risk Management

Chapter 13: Trading Psychology

Full Content Index

Summary 5

Bio Author and Partners 17

Author 17
Chris Svorcik 17
Partners 18
Elite CurrenSea - www.EliteCurrenSea.Com 18
Nenad Kerkez 19
Mislav Nikolic 20
A Short History Plus Performance 20
Mislav Nikolic’s Ultima EA 22
ecsLIVE, ecsCAMMACD, and ecsSWAT 24

Prologue 28

Chapter 1: Introduction 30

Chapter 2: Our View on Fundamentals 32

Our Prism for Analysing 32
Supply and Demand 33
Conclusion 35

Chapter 3: Price Action and the Path of Least Resistance 36

Path of Least Resistance 36
Trend, Momentum, and the Building Blocks of the Charts 37
Chart Hierarchy 40
Candlestick Basics 42
Candlesticks Explained 42
Correlation between the Open and the Close 43
Candlestick Patterns Explained 49
Bearish Reversal Candlestick Patterns 51
3 Black Crows 51
3 Inside Down 52
 Evening Star 52
Upside 2 Crows 53
Harami 54
Bearish Abandoned Baby 54
Meeting Lines 55
Dark Cloud Cover 56
Advance Block 57
Bearish Continuation Candlestick Patterns 58
Falling 3 Methods 58
Bearish 3 Line Strike 59
Marubozu Bearish 59
Bullish Reversal Candlestick Patterns 60
Bullish 3 Inside Up 60
Bullish 3 Outside Up 61
3 White Soldiers 61
Concealing Baby Swallow 62
Morning Star 63
Piercing Line 64
Bullish Belt Hold Lines 65
Harami Cross 65
Harami Bullish 66
Tweezers 67
Bullish Squeeze 67
Bullish Continuation Candlestick Patterns 68
Rising 3 Methods 68
Side By Side White Lines 69
Marubozu Bullish 69
Price Swings: the 4 Types of Price Action 73
Identifying Price Swings 75
Strong vs Weak Price Action: Momentum and Correction 76
Impulsive Price 76
Corrective Price 80
HMA 84
ECS Fractals 84
Time Patterns and Zigzag Pattern 86
Awesome Oscillator or ecs.MACD 87
Benefits of Oscillator in Wave Analysis 89
Reading the Oscillator 90
How to Find the Price Swing 91
 Wave Patterns 95
Identifying Momentum & Correction 96
Swings Become Patterns 98
Chart Patterns 99
Bullish and Bearish Continuation Patterns 99
Bullish and Bearish Reversal Patterns 102
Seeing and Recognising Patterns 106
Swings Form Trend 106
Defining the trend 107
Classical HH and LL 110
Moving Averages 112
Correct time frame trends 114
Range or consolidation 115
Reversals 115
Retracements 116
Retracements: how far can we expect the price to go? 121
Direction of the trend 125
Spacing between averages 125
Moving average numbers 126
Short-term MAs 126
Long-term MAs 127
Combining short and long-term 128
Momentum MA 128
Trending market 129
Trend channels 131
Good angle 132
Too steep channel 132
Too shallow channel 133
Sideways channel 133
Multiple hits 134
Internal channel lines 135
Price action versus channel 136
Using single trend lines 138
Steep trend lines (inner) 139
Medium trend lines 140
Shallow trend lines (outer) 140

Chapter 4: Support & Resistance 142

Support and Resistance Explained 142
 Why Are Support & Resistance Levels Important? 144
What is the Benefit of S&R when Trading? 144
How do you Spot Support and Resistance Levels? 145
What Tools and Indicators Show the Best S&R? 148
Dynamic S&R Levels 148
Fixed S&R Levels 149
Semi Dynamic S&R Levels 149
Automated vs. Manual S&R Levels 151
Which are the Best Support and Resistance Levels? 151
The Most Precise S&R Levels 152
How Can Traders Trade at Support or Resistance? 154
How “Precise” are S&R Levels? 155
S&R Plays Vital Role in Market Structure Triangle 156
Trend versus S&R 156
How Can Traders Measure Break or Bounce Chance? 157
1) Measuring Support & Resistance Strength 157
2) Measuring Trend Strength 157
3) Impact of Price Patterns 158
4) Number of Approaches 158
Examples from the Above 158
Summary of the Above 159
What is the Target of the Bounce or Break? 159
What are the Best Time Frames for S&R? 160
Summary Support and Resistance 160

Chapter 5: Patterns and Triangle of Analysis 162

Path of Least Resistance Explained 163
Flow versus Resistance 165
Price Patterns 167
Wave Patterns 167
EW Rules and Guidelines 172
Wave Degrees 172
Alternation (“expect a difference in the next expression of a similar pattern”): 172
Alternation of corrective waves: 172
Alternation of motive waves: 173
Balanced Proportions (“The Right Look”): 173
MotiveWave: IMPULSE 174
Rules: 175
Guidelines: 176
 Fibonacci Retracement and Extension Guidelines: 176
MotiveWave: DIAGONAL 177
Rules: 178
Guidelines: 179
Fibonacci Retracement and Extension Guidelines: 179
Corrective Wave: ZIGZAG 180
Rules: 180
Guidelines: 180
Fibonacci Retracement and Extension Guidelines: 181
Corrective Wave: FLAT 181
Rules: 181
Guidelines: 181
Fibonacci Retracement and Extension Guidelines: 182
Corrective Wave: TRIANGLE 182
Rules: 183
Guidelines: 183
Fibonacci Retracement and Extension Guidelines: 183
Corrective Wave: COMPLEX COMBINATIONS 184
Rules: 185
Guidelines: 185
Fibonacci Retracement and Extension Guidelines: 186
Divergence Patterns 186
Time Patterns 189
Timing of impulse 189
Timing of Correction 195
Fibonacci Patterns 197
Fibonacci Sequence Levels 198
Fibonacci Retracement 199
Why Fib discounts work and when not 203
Shallow vs Deep Retracement Fibs 204
Fibonacci Targets 204
Problems with Fibonacci 206
Fibonacci for Entries 213
Stop Loss with Fibs 214
Confluence with Fibs 216
Waves with Fibs 219
Deeper Reading of the Market Structure 223

Chapter 6: Making a Coherent Analysis 230

 Case study 1 231
Case study 2 255

Chapter 7: SWAT Method and Moving Averages 273

What is SWAT? 273
Using moving averages for market structure 276
MA Process Explained 277
Benefits of MAs 281
Which MA Numbers? 284
Using MAs Without Waves (for Non-Wave Traders) 286
Other MA factors 288
Factor 1: space between 21 ema and 144 ema (see image below). 288
Factor 2: the number of candles not hitting or touching the 21 ema. 289
Factor 3: divergence and 144 ema. 291
Factor 4: price breaking through 21 ema zone and 144 ema close. 292
Factor 5: 21 and 144 emas crossing. 293
Factor 6: Fractals versus 21 and 144 ema. 293
Short-term MA aspects 294
Using all MAs as a road map 295
Break of 21 ema with trend 296
Bounce at 21 ema with trend 297
Continuation away from 21 ema zone with trend (2nd breakout) 300
Break of 21 ema zone counter trend back to 144 ema 301
Bounce at 144 ema with trend 302
Break of 144 ema against trend 303
Impulsive price action 303
Triangles and corrections 305
Reversal candlesticks back to 21 ema zone 308
Translating Wave Counts With EMAs (for Wave Traders) 309
Difficulties with Wave Analysis 309
Using MAs for Wave Patterns 311
Waves 3, 5, or C 313
Waves A, C or 1 314
Waves 2 or 4 in momentum 315
Waves 2 or 4 in trend 316
Waves B 317
Waves WXY Complex Corrections 318
Waves ABCDE Triangle 318

Chapter 8: SWAT Method from A to Z 320

Step 1: use swat.CANDLES and tools for easier trade setups 320
What is meant by a “new” blue or red candle? 322
Not all swat.CANDLES are entries 323
What time frames? 329
When do the swat.CANDLES appear? 329
What about the other basic SWAT indicators? 330
swat.ARROWS 331
HMA 20 331
Step 2: use swat.FRACTALS for deeper patterns 334
What is a Fractal Indicator? 335
What Does the Fractal Indicator Show? 337
Filtering out setups 338
Reversal setups 339
Breakout setups 340
Fractal Position versus MAs 340
swat.FRACTALS and Levels 342
Using the swat.FRACTALS 348
Step 3: use ecs.WIZZ for finding the space 353
Speed vs gravity with ecs.WIZZ 355
What is ecs.WIZZ? 356
ecs.WIZZ levels with different time frames 358
How to find the wide open chart spaces 362
ecs.WIZZ levels with different pairs 363
Where to place ecs.WIZZ indicator exactly 364
When to reset the ecs.WIZZ indicator 365
Using ecs.WIZZ indicator as targets 367
When to use tops/bottoms or 144 ema close 368
ecs.WIZZ indicator explained 369
Step 4: read the waves via oscillators 370
Step 5: using new ecs.SWAT indicators 376
ecs.MACD 376
swat.PULLBACK 378
swat.CS-DOTS 380
swat.IMPULSE 383
swat.OSCILLATOR 385
swat.CANDLES-MTF 386
swat.FRACTALS-MTF 388
swat.STRENGTH 389
Step 6: ecs.SWAT strategies 392
 Approach 1: Wave strategies 394
Trend 1: 21 ema bounce and break via swat.CANDLES/ARROWS 395
Trend 2: 144 ema bounce via swat.CANDLES/ARROWS 398
Trend 3: 144 ema break via swat.CANDLES/ARROWS 401
Reversal 1: move back to 21 ema via candlesticks 404
Reversal 2: move back to 144 ema via swat.CANDLES 405
Stop Loss and Targets for Wave Trades 406
Approach 2: Discretionary setups with ecs.SWAT 407
Stop loss approaches for discretionary trading 411
Take profit approaches for discretionary trading 414
Approach 3: Rules Based SWAT Strategies 418
STRATEGY 1: SWAT CLASSIC 419
Basic Rules 419
Retracement Rules 425
Opposite candle in retracement 425
Grey candle in retracement 427
Wizz Rules 430
Targets 434
Stop loss 437
Trail stop loss 441
Case study 441
Other live examples 445
Final words on ecs.SWAT 452
Step 7: trade management 453
Phase 1: wait 455
Phase 2: tight 457
Phase 3: wait 458
Phase 4: tight 459
Step 8: multiple time frame analysis 460

Chapter 9: Ultima EA: Automated Trading System 465

Live Trading Since June 2019 465
Account number 1 - June 2019 - moderate risk 465
Account number 2 - August 2019 - max risk 467
Account number 3 - August 2019 - max risk 470
Account number 4 - August 2019 - max risk 471
The Back Test Results from A to Z 471
What is the draw-down? 477
The Methodology Behind the Back Testing 478
 What Are the 2 Main Traps for EAs? 479
Did you do more testing? 480
Advantages of Ultima EA Strategy 481
The Strategy Behind Ultima EA 482
Step 1: TREND. 482
Step 2: PULLBACK. 482
Step 3: CONTINUATION. 483
Step 4: FILTERS. 483
Step 5: ENTRY, EXIT, and TRADE MANAGEMENT. 483
Bullseye Target Tool Explains Large Part of Ultima EA’s Success 483
How Long for Creating an EA? 485
Mislav Nikolic, Creator of the Ultima EA 486
Support from ecs.SWAT Creator Chris Svorcik 487
What Are the Strengths of Ultima EA? 488
How are Ultima and SWAT connected? 488
How to Trade with Ultima EA? 489

Chapter 10: Decision Zones and Triggers 490

Triangle of Entries 491
Decision Zones 492
Trigger and Entry 495
Open Spaces 506
Confirmation and Invalidation Levels & Patterns 509
Confirmation and Invalidation of price patterns 509
Confirmation and Invalidation of Your Setups 514
Candlestick close 514
Candlestick Size 516
Patterns Are Imperfect 517
Invalidation Levels 517
Breakouts and Bounces 518
Wrapping it up 519

Chapter 11: Deeper Market Thoughts 520

Price Fits within Fractal and Chaos Theory 521
Patterns Remain a Probability 523
Why Do Patterns and My Analysis ‘Fail’? 526
Tying It Together 527

Chapter 12: Risk Management 530

Using Stop Loss 530
Max Risk Leverage Per Setup 532
 Limiting Draw-down 533
Account Management 536
Elliott Wave Risk Plan 536
Risk Management Ratios 537
Reward to Risk (R:R) ratio 537
Sharpe ratio 538
Sortino ratio 538
T-Statistic 538

Chapter 13: Trading Psychology 542

Part 1: Why is trading psychology important? 542
Minimizing the gap 543
Optimizing psychology and strategy 544
Part 2: Why is trading psychology so hard? 545
Greed, hope, fear, impatience 545
Fear of losing 547
Fear of missing out 547
Fear of profitable trade turning bad 547
Fear of being wrong 547
Greed 548
Hope 548
Boredom 548
Frustration 549
How to Control Emotions in Trading With Strategy 549
Conclusion: Trading Without Emotion 549
Personal and market beliefs 550
Why is a mindset important? 551
Trading Bias 551
Characteristics of a confident versus fearful trader 553
Discipline and patience 554
Discipline 555
Discipline can be increased by creating a routine. 555
The next golden rule is to tackle goals step by step. 555
Organize yourself by writing down (on paper, pc, tablet) the tasks. 555
Patience 556
Regain control and improve patience 557
Wait 1 candle technique 557
Conclusion 557
Part 3: How do I improve trading psychology? 558
 The mindset test 558
Dangers of a ‘nervous mindset’ 559
Benefits of a cool mind set 560
The mindset journey 560
A balanced confidence 561
Trading in the zone 563
Working on Detail: Accepting Losses 565
Difficulties with negative feedback 565
The market is the market 565
Working on Detail: Evaluations 566
Working on Detail: Focus 568
Working on Detail: Adjusting the Mood 569
Market movements 569
Working on Detail: React, Do Not Predict 570
Part 4: Other practical tips 571
Practical Tip 1: Removing nervousness when trading 571
Practical Tip 2: Trading conditions you want to avoid in Forex market 572
Chasing the market! 572
Jumping the gun! 572
In need of trading! 573
Proving yourself right or the market wrong! 573
Not mentally focused and ready! 573
Trading without an open attitude! 573
Practical Tip 3: Consistency is the final step 573
Conclusion 573

Conclusion and Summary 575

Thank yous 577

Prologue
Trading is more complex than just knowing how to use a pinbar candlestick for instance.
Traders often try to trade the price charts with just a few simple tools, but it is not enough
information to really understand the price movements.

Trading is like learning a ​language​. The more words you know, the more you will be able to
understand and communicate in that language. The charts are also communicating information
to us traders with every single candle. It is up to traders to learn the charting language
sufficiently. The ecs.SWAT approach helps traders reach that goal.

Pinbars are a useful piece of information but will rarely bring success on its own. This is not
enough information to gain an in-depth understanding of the market structure and price charts.
Trading is not that easy.

To truly understand the price charts, you need to know that the financial markets move in price
swings, chart patterns, and waves, which is like the ​DNA ​of a chart and happens on all time
frames and financial instruments.

These price patterns are the most important aspect of trading. Even more important than
support and resistance (S&R), because traders can based on price patterns make an estimate
what price will do at S&R. What do we mean with an estimate?

By analysing price swing, chart patterns, and wave patterns, traders can understand, analyse,
and estimate the price charts and use it like a ​road map​ for price. Within that road map, price
will find a path of least resistance. Traders can analyse what the future path of least resistance
will be and estimate their trade ideas within that likely ​price path.​ How can you measure the
road map and price path?

Moving averages. ​They are a delightful tool and the best indicator for understanding the price
charts in a simple and deep way at the same time. With moving averages, traders can estimate
price swings, chart patterns, and wave patterns in a more precise and quicker way. Together
with Fractals, Fibonacci, and other proprietary tools and indicators, we built the ecs.SWAT
method that shows traders the expected price path in a simple way.

The ​ecs.SWAT method​ stands for Simple Wave Analysis and Trading. But it is more than just
waves, it’s about understanding the charts and the expected price path. Most traders struggle to
recognize a price swing, a wave, and the bigger price movements.

The ecs.SWAT book is most focused on ​practical solutions (98%)​. We show traders a
systematic way of identifying one price swing. We explain how to identify impulsive and
corrective price swings, how to spot chart patterns, the trend direction, and S&R. But we also
show some theory (2%) as well where we explain how patterns repeat throughout time, with all
instruments, and on all time frames because the market is fractal in nature. Candles and price
swings are like pieces of Lego as they build up to something larger.

Simply said, we show traders how to recognise patterns and trade them. More importantly, we
explain how moving averages and our ​SWAT tools and SWAT strategies​ help simplify both
the process of identifying patterns and trading them. With a simple yet deep way of doing
technical analysis based on our SWAT methods, traders can make an educated assumption
about direction and likely trades.

We hope that the ecs.SWAT book gives you as much joy as I had when writing it. Above all, we
hope that the material here makes the reader a better chart analyst and a better trader. Even if
the materials help improve your skills with 10%, it is already a success. But secretly, I hope that
you gain much more out of the ecs.SWAT book. There is certainly a ​wealth of information​ to
be discovered in this SWAT book so I hope that you embark on a life-time ​trading journey ​with
ecs.SWAT in hand.

In Chapter 1 the introduction, we dive into why trading is exciting and why it offers multiple
benefits. In chapter 2 we shortly explain our view of fundamentals. As you might know, we are
technical traders which is why chapter 2 is short and to the point and more space (99%) is
dedicated to technical analysis.

In chapter 3 till chapter 11 we discuss technical analysis only. First of all, all levels of price
action in chapter 3 before discussing support and resistance in chapter 4. Then we continue
with price patterns in chapter 5. In chapter 6 we use the information from chapters 3, 4, and 5
for making a full scale analysis in a practical way with two cases studies.

Chapters 7 to 10 focus more on trading then analysis. First we explain the SWAT method that
Chris has created in great detail in chapters 7 and 8. There is also an overview about Nenad’s
CAMMACD method in chapter 9 before we discuss our first automated way of trading called
Ultima which was created by Mislav Nikolic and Chris Svorcik in chapter 10.

Then in chapter 11 there is a last overview of how traders can trade using decision zones and
triggers before moving into the last topics of the book such as deeper market thoughts in
chapter 12, risk management in chapter 13, and trading psychology in chapter 14.

Enjoy and good trading!

Chris Svorcik

24th of August, 2019 1st edition

2nd of May, 2020 2nd edition
A few excerpts from the entire guide:

Pages 73-75:

Price Swings: the 4 Types of Price Action

The previous two parts showed you how to read candlesticks and how to understand
candlestick patterns. This will become important later on in the book when we are analysing
how price action is behaving when reaching a key decision zone and we need to measure
whether price is bouncing or breaking.

Price swings are groups of candles that “belong to each other”. The candles make one swing
because they share certain characteristics together. Swings are considered to be a group of
candlesticks where the majority share:

1. Common direction (bearish or bullish)

2. Strength (strong or weak).

Simply said, price swings are either impulsive (strong) or corrective (weak) and they are either
bullish or bearish. It is important to know that strong price movement is called impulse or
momentum whereas weak price action is known as corrective or consolidation. The strength or
weakness of price flow can be understood by analysing whether price is behaving impulsively or
correctively.

This creates four different types of price movements, which in some ways can be seen as the
“DNA” or “heart beat” of the market:

Direction / Speed Impulsive Corrective

Bullish Bullish impulse Bullish correction

Bearish Bearish impulse Bearish correction

Each of these four variations represents a seperate “price swing” or “wave”. Every price swing is
either ​bearish or bullish ​and​ ​either ​impulsive or corrective.

It takes time and experience to recognise which price action belongs to one price swing... But
the above table provides a key starting point. You will also be able to spot price swings better
when using our ECS rules and guidelines.
GBP/USD 4 hour chart: blue arrows indicate bullish momentum, green arrows indicate bullish
correction, red arrows indicate bearish impulse, and orange arrows indicate bearish correction.

You might be wondering: what is the benefit of knowing this information about the price swing?

Price swings provide key information about the market structure. Traders that correctly analyse
and understand price swings have the following advantages:

● Character of current price swing: ability to analyse past price swings to estimate the
current price action more accurately.

● Length of current price swing: ability to analyse the current price swing (character /
direction) and thereby also understand how long the price swing will last and when it
could end.

● Character of the next price swing: ability to analyse past and current price swings to
estimate the character of the next swing price swing.

Price swings are important because of these nine reasons:

1) It allows traders to understand what type of price swing they are trading.
2) It explains what to expect from the current swing in terms of movement and
volatility (impulse versus correction).
3) It explains what target could be expected and what stop loss works better.
4) It indicates what the direction of the next price swing could be.
5) It also shows whether the next price swing will be corrective or impulsive.
6) Traders can do wave analysis and understand wave patterns based on price
swings, which are the building blocks of swing.
7) Traders can use the Fibonacci tool with more accuracy and precision.
 8) Traders are better able to estimate the time aspect and expected length of a
trade setup.
9) Traders can identify patterns quicker and easier.

Traders ​must ​have a clear and logical system of identifying one price swing because without a
rules based approach, traders will misinterpret the chart and be unsure about their analysis. In
fact, most traders fail in trading, analysing the waves, ​and ​trading the waves because they do
not use a systematic method for understanding and reading price swings.

Based on the above info, traders can make better decisions about their trades, such as skipping
setups, managing open trades, and entering trade setups. Price swings are not the only factor
for trading decisions, of course, but certainly play a key role in our analysis.

The next step is how can you recognise price swings, which we will explain in the next
paragraph. Just by identifying price swings correctly, traders are able to gain a significant edge
over a larger group of traders who are not aware of price swings, price patterns, impulse and
correction. After that, we will discuss how to actually use price swings.

All in all, keep in mind that it is very important to use a systematic approach for spotting price
swings because without it, traders will not be able to properly analyse the price charts. It would
be similar to a ship sailing on open waters without a compass. Recognising price swings,
knowing the start and end of such swings, and analysing that information properly is.

Ps. the answer to the quiz question on candlesticks is answer A!

Identifying Price Swings

The ​ecs.SWAT method​ uses ​six distinct approaches​ to find and identify the correct AND best
price swings:

1. Momentum and correction concept

2. HMA moving average
3. Awesome Oscillator (AO) and ecs.MACD
4. ECS fractal indicators
5. Time patterns and zigzag indicator
6. Wave patterns

In some cases these 6 methods will indicate the same price swing but be aware that each
method could also indicate a different price swing. And that is perfectly acceptable. Price swings
can vary depending on the tools and methods used and all of them can be equally logical. It is
up to the trader to choose the price swing that makes the most sense but the mentioned
methods will provide a solid basis.

Strong vs Weak Price Action: Momentum and Correction

Usually impulsive price action belongs to one price swing whereas corrective price action
belongs to one bigger price swing as well.
Let’s examine what traders should consider as impulsive (strong) or corrective (weak) price
action. Here is an overview:

Pages 231-234:

Chapter 6: Making a Coherent Analysis

Congratulations, you have now completed the triangle of analysis, which in our eyes helps both
enrich ​and s​ implify your analysis at the same time. The last three chapters have discussed all of
its components in full depth but separated and in isolation of other factors.

Of course, in real life all aspects are analysed in one coherent analysis. Now it’s time to connect
the dots and use all of the concepts in one fluent analysis from A to Z.

This chapter translates the theory from the triangle of analysis into practical implementation on
the chart. It should help explain how we analyse the price charts of financial instruments when
applying the triangle of analysis perspective.

We will show multiple case studies so you see theory in action and translated into practice.
Case study 1 shows a top-down approach which starts with the monthly chart whereas case
study 2 focused on the 4 hour chart trading and case study 3 on the 15 minute chart. These
case studies will focus more on analysis and mention some trading ideas as an extra whereas
more intense trading methods will be discussed in the SWAT method and triangle of entries
chapters.

Case study 1
Depending on your trading style, you might want to figure out what is the long-term direction of
the currency pair. Keep in mind that this is not necessarily needed for traders that take entries
on a 4 hour chart or lower but for the first example we will provide a full top-down approach
which starts with the monthly chart. For the first case study we choose the EUR/USD during July
2018.
The EUR/USD long-term outlook offers both a bullish and a bearish version when looking at the
monthly chart (see image above and below for both variations). In many cases, I only add the
wave analysis that seems most probable but it is always fine to keep a few variations in mind -
especially if the outlook is unclear. In most cases, I will have a favourite wave outlook but
sometimes two or three wave scenarios could be all equally likely.

Although the two wave outlooks differ in the long run, the interesting aspect is that they both
indicate the same direction in the near future: downside is expected in both cases because price
is either starting a new red wave C (see image above) or price is building a bearish retracement
in blue wave B (see image below).
Now let’s take a look at the weekly chart (below). What wave patterns do you see?

The clearest wave pattern is the 5 bullish waves up (image below). After 5 waves, traders
should at least expect an ABC correction but if the 5 bullish waves end a wave C, then a new
downtrend is possible too.

Once again, in both cases, we are expecting the wave patterns to be bearish. The character of
how price moves lower will reveal some tips on whether price is building a bearish ABC or a full
5 wave downtrend. Lets now analyse the bearish price action on a daily chart.
The daily chart (image above) showed very strong bearish momentum because price was:

1. Showing typical impulsive behavior (most candles bearish, closes near the low,
continuous lower lows).
2. Pulling away from the 21 ema zone for 28 candles (see SWAT method chapter for more
info on its importance). This is classical impulsive price action.

What wave pattern matches this particular bearish impulse?

Pages 274-279

Chapter 7: SWAT Method and Moving Averages

The ecs.SWAT method uses all three parts of the triangle of analysis, which includes support
and resistance, trend and momentum, and price patterns. What makes ecs.SWAT special is its
ability to make deep chart analysis based on price patterns, chart patterns, and wave patterns,
but in a quick and simple way.

The learning curve for successfully analysing and trading the markets based on wave patterns
and chart patterns is lengthy and requires lots of experience. The Elliott Wave (EW) Theory can
be simultaneously fascinating and frustrating and not many traders have the patience for
developing the skill set properly. Primarily because it takes years if not a decade or more to
become a successful EW trader.

The wave and chart patterns provide a rich and deep way of understanding the financial
markets but taking trading decisions based on wave theory or chart patterns comes with
challenges. Beginning traders who trade based on EW are surely to stumble hard.

The process often goes like this: they learn a few EW rules, make quick conclusions about the
wave structure of a chart, take a trade, and are then surprised it doesn’t work. It would be
similar to a student of medicine who walks into an operation room after 1 day of classes. Failure
is likely, success a rarity.

Although learning the EW in specific or pattern trading in general from a theoretical and practical
is slow process, there is good news: my ecs.SWAT approach bridges that gap and speeds up
the process. The ecs.SWAT is named ​Si​ mple ​W​ave ​A​nalysis and ​T​rading for a reason.

My method tries to shorten that learning curve by emphasizing the practical side of analysing
the markets rather than clinging on to impractical theory. The approach is not only simplifying
the wave patterns but is based on moving averages, Fibonacci, Fractals, price swings,
price/chart patterns, and time patterns to help simplify the information from the chart.

So the emphasis on wave patterns is therefore a bit misleading. It is actually a more inclusive
method that focuses on the entire market structure, rather than only waves. The EW Theory and
the wave patterns are just one component of the SWAT approach because we also emphasize
the entire triangle of analysis, fractal nature of the market, and deeper market patterns.

Conclusion: SWAT is much more than waves, it is deep market understanding done in a simple
and quick way.

What is SWAT?
But SWAT is more than a method and deep market understanding. It is a software package with
proprietary indicators as well.

● Method​: proprietary way of analyzing the charts and finding trade setups
● Software​: proprietary indicator package based on MA's, Fibs, and Fractals for MT4
● Strategies​: proprietary entries and exits based on wave strategies, discretionary
strategies, and rules based strategies

We will start explaining the method in this chapter whereas the software and strategies side will
be explained in the next chapter. But before we start, let me tell you that there are a sea of
opportunities with SWAT that I would not be able to explore on my own even if I spent the rest
of life only researching and expanding SWAT. How I use SWAT is just really but one way. There
are so many more undiscovered and hidden opportunities with SWAT and I am sure that some
of our SWAT fans will find them.

Although we explain deeper theoretical parts as well (chapter 12 Deeper Market Thoughts), our
core focus is on translating theory in practical trading decisions and advice. We do add theory
so readers understand where our ideas are coming from and how they have been used to
underpin the logic of our trading approach.

We decided, however, to show the ​SWAT methods, software, and strategies first​ and then
discuss the ​theory later​. The reason is that not all traders are interested in the theoretical part
underpinning behind the methods. Also, the content could otherwise be considered too slow and
lengthy for readers, which is why we decided to focus on the SWAT method, software and
systems first.

The SWAT 2.0 course (​https://elitecurrensea.com/forex-cfd/swat/​) explains this 600 page eguide
via videos. It has 74 videos and 22+ hours of recordings. Traders that prefer a more visual
approach could certainly consider the course, starting at 473 euro one time fee for life-time
access (no upgrades or extra fees later on). There are 2 parts: education (13 hours) and SWAT
part (9 hours).

Here is an overview of the entire SWAT 2.0:

● 74 videos
● 22+ hours recording
● Education (13h) and SWAT part (9h)
● 6 PDFs with summary
● Checklist and cheat sheet
● 15+ SWAT indicators
● 10 SWAT templates
● 3 approaches
● 10 strategies
● 5 entry options

The 3 approaches are as follows:

1. Rules based method
2. Wave method
3. Discretionary method

The methods have trading systems, there are 10 in total:

1. Rules based method
a. SWAT Basic
b. SWAT Classic
c. SWAT MACD
d. SWAT Pro
 2. Wave method
a. Trend 1
b. Trend 2
c. Trend 3
d. Reversal 1
e. Reversal 2
3. Discretionary method

There are 5 different types of entries:

1. swat.CANDLE
2. swat.ARROW
3. HMA
4. swat.MACD
5. Fractals

Become a SWAT member here: ​https://elitecurrensea.com/forex-cfd/swat/​.

In this 600 page eguide we will explain a decent amount of the SWAT course, but not
everything. SWAT Basic Classic are partly explained, but not SWAT Pro for instance.

To explain the SWAT method, we must first review the SWAT software (all of the key tools and
indicators) that is used. After that we will explain some of the SWAT systems - both
discretionary approaches and rules based strategies.

First of all, the main indicators of the ecs.SWAT method are:

● Moving averages (MAs)

● Fibonacci
● Wizz (Fib sequence levels)
● Fractals
● swat.CANDLES
● swat.ARROWS
● Oscillators
● Price action
● CS dots
● And many more

This chapter is fully focused one on the first one of the list: moving averages (MAs), which is a
critical tool for understanding the market structure of a chart and the psychology of price.

This chapter is a bit lengthy because it covers all of the ways that MAs are relevant. The good
news is that traders do not need to know it before trading the SWAT method (see the next
chapter). That said, understanding the logic behind MAs however gives more insight of the
approach.

Using moving averages for market structure

The moving averages are of immense importance for understanding the context of the chart.
Ironically, many beginning traders do use MAs but in a wrong and oversimplified way. For
instance, they look for MA crossover entries which in the long-term usually fail. The MA’s
provide a wealth of information about the price chart but in a different context and certainly not
for crossover entries.

So what are the benefits of the MAs?

With MA’s as a tool, traders can understand both wave and chart patterns of the market without
actually counting or knowing the Elliott Wave Theory or chart pattern names. Why?

Because the waves that price makes respond in similar and repetitive ways to the moving
averages. Here is how it works: by understanding how a) price moves in relationship to MAs, b)
how MAs move in relationship to other MAs, and c) the angle of the MAs, traders can capitalize
on the wave patterns and wave movements without knowing or identifying the waves. This
means​ analysing MAs is a short-cut for understanding the market structure,​ wave patterns
and chart patterns.

You might be wondering then how does price move versus the MAs. Basically, price is always in
a constant flux of moving away and back to the MA’s (similar to the tide of the sea), which is
valid for all financial markets and time frames. The position of price and the MA’s is the key.

By analysing price and the MAs, traders can understand the chart dynamics in various ways
and help determine:

1) Whether the market is trending or ranging

2) The direction of the trend
3) When price is moving impulsively
4) When price is moving correctively
5) When the MAs are expected to act as a support or resistance
6) When price is likely to continue with the trend
7) When price could make a reversal

Let’s now explain the MA behavior in more detail.

MA Process Explained
The previous paragraph explained how the relationship of price and MAs is critical for
understanding the charts. In this section we will split the market behavior into 5 distinct phases
such as trend, shallow pullback, deep retracement, trend overextension and reversals, and
range.

The process of how price moves versus the MAs and the MAs move versus other MAs during
each of the 5 phases works like this:

1) Market is in a trend (see image below for the spot of each letter).

For a downtrend, price is below or at the 21 ema zone, which is below the 144 ema
close.
For an uptrend, price is above or at the 21 ema zone, which is above the 144 ema close.

For a trend, price and the MAs need to be aligned. Here are also other key
characteristics:

a) Price is pulling away from the MAs

b) Short-term MA (pink) is pulled away from the medium-term MAs (orange)
c) Medium-term MAs are pulled away from long-term MA (purple)
d) Medium term MAs have an angle (not flat)
e) Medium-term MAs are not hitting long-term MAs
f) Increasing space between medium-term MAs and long-term MAs
g) Price in or moving away from medium-term MAs
Pages 321-322

Chapter 8: SWAT Method from A to Z

The moving averages (MAs) provide a wealth of information about the chart and are a short-cut
for understanding the price and wave patterns. The SWAT method is largely based on the logic
of moving averages, Fibonacci, and Fractals.

The first question you might be on your mind is how profitable is it? This can be answered in
multiple ways because SWAT is a method which traders can use for understanding and
analysing the charts, an indicator package for quick entries and understanding the charts, and 3
different types of strategies, which are wave strategies, discretionary strategies, and rules
based strategies, including Ultima our automated trading systems (see chapter 9).

The results that are mentioned in this book are a reflection of only two different strategies, which
are the trades that I took with ecs.LIVE and the back testing done with Ultima (SWAT based
strategy). The results do not show the potential of wave or discretionary strategies, nor the
potential of other yet to be discovered rules based strategies.

If you are curious about the results, then I invite you to check out chapter 1 again (ecsLIVE
results) and chapter 10 (Ultima testing).

Step 1: use swat.CANDLES and tools for easier trade setups

Although the MA logic helps digest and simplify the market structure for all traders, it still
requires some experience to understand when and where to find the best trade setups.

To simplify the trade setups even further, we decided to simplify the process by creating our
own proprietary indicator called the ​swat.CANDLES.

The swat.CANDLES are based on 3 colors:

1. Blue = bullish
 2. Red = bearish
3. Grey = neutral

The SWAT method is looking for swat.CANDLES to confirm an entry.

A ​new​ red candle or ​new ​blue candle indicate a potential trade - here is how:

● Blue is a potential long setup - buy

● Red is a potential short setup - sell

You can see a few examples in the image below (purple boxes). The first breaks after a strong
retracement are always treated with more caution (orange box).
Pages 466-472

Chapter 9: Ultima EA: Automated Trading System

The Ultima EA is a fully automated trading system for the Forex market and the MT4
(MetaTrader 4) platform.

Ultima is created by ​Mislav Nikolic ​and it takes care of entries, exits, and trade management.
Zero manual intervention is needed - nor wanted.

The Ultima EA allows traders to trade the Forex market without being chained to the PC and
charts. In fact, checking the platform for a few seconds a day is enough. Any type of trading can
therefore benefit from Ultima EA, even those with demanding full-time jobs or other full-time
commitments.

It all started when Mislav and I were looking for a way to earn a more passive income from
trading and eventually (semi) retire… Thanks to Mislav’s persistence and ingenuity, the Ultima
EA was created and it has shown exceptional results in almost a year of live trading.

This chapter shows the back testing results ​and ​real live trading performance (with Myfxbook
links). It also provides information about the strategy itself and Mislav the creator, plus it
explains how you can trade the Ultima EA trading system too.
Live Trading Since June 2019
The live trading results have been remarkable and fantastic. Of course, the longer the track
record, the more impressive the results will become. Currently (2 May 2020), Mislav and I have
been trading Ultima EA since June 2019 and August 2019 for a total of 11 and 9 months.

Account number 1 - June 2019 - moderate risk

Our first account started with a moderate risk approach of 3% risk per setup and a $10,000
starting balance. We choose to trade EUR/USD currency pair and a 15 minute time frame only.
The account is now (2 May 2020) showing an impressive profit: $41,559.

The gain is an impressive +415.6%. The draw-down is very low: only 13.25%. (first image
below)

As you can from the images that show the monthly profit division, not each and every month is
profitable. This is not a system that aims for daily, weekly or even monthly profits. Ultima EA is
aiming to build the account in the long-term, over 6 months, 1 year, 3 years, etc. In fact, even a
whole year might turn out to become negative. This is the risk of trading. But based on the
sturdy strategy rules and lengthy and quality back-testing, we believe that the long-term
advantage is on our side to make decent profits.
 ○ Main account EUR/USD 15min 3% risk from June 2019

https://www.myfxbook.com/members/CurrentSeaForex/ultima-swat-ea/3601444

Account number 2 - August 2019 - max risk

My own personal account was traded with the maximum risk of 5% per setup. It was also traded
on the EUR/USD and 15 minute time frame. I started with a total capital of almost 25,000 euro.
○ Chris' EUR/USD 15min 5% risk from August 2019

https://www.myfxbook.com/members/CurrentSeaForex/ultimaswat-eurusd-15min/
3524413
Account number 3 - August 2019 - max risk

○ Chris' GBP/USD 60min 5% risk from August 2019

https://www.myfxbook.com/members/CurrentSeaForex/ultimaswat-gbpusd-60min
/3524417

Account number 4 - August 2019 - max risk

 ○ Mislav’s EUR/USD 15min 5% risk from August 2019

https://www.myfxbook.com/members/BullCapital/ultima-5/3472089

The live win rate is currently about 65%.