Trading is a complex process, not like any other, although some may see it as rather tedious or even simplistic. That could never be further from the truth, as it requires a definitive amount of calculations for a better understanding of processes that take place on the market areas.

Parted to the main types of technical analysis and fundamental analysis both, the practical approach of this will follow a decent amount of time invested into it. As the technical analysis serves for daily comprehension of the data involved, there are also certain aspects of this which prove it essential for any kind of involvement with the markets.

Waterfall Effect theory

The fundamental analysis on the other hand will initiate the policy of monetary issues that take hold to the markets in action. Given the correct directives of market movements, several approaches to this problem have already been established, each providing a set of helpful indicators that are working all the way in. Some of the most commonly selected would include the theories behind Gann, Elliot, Gartley and others, involving the concepts of waves and oscillators alike.

In contradiction to popular belief, the most popular pattern of the trading scene would be the so called Waterfall Effect. It is best known for identifying the corrections in complex waves, but serves a much larger purpose than even that. The corrections taken of the applicable waves, provide multiple patterns in a varying degree, which makes the progress through any analysis much more significant and fruitful. The process will undeniably create a clear view on how to perceive the retracement level and furthermore an entire reading of the complex correction.