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Basic Elliott Wave Theory: Elliott Wave was developed by R. N.
Elliott (1938) as a way of analysing the equity markets, which tend to have a
natural bullish cycle. This should be borne in mind when attempting to apply
this principle to markets, which do not have the same cyclical tendencies, such
as currencies and bonds. From the analytical perspective , the key is to
determine the impulsive and corrective waves. Once the impulsive waves have been
identified, the five wave sequence needs to be identified to provide a starting
point from which to commence the analysis.
1) Wave 3 cannot be the shortest of the impulsive waves 2) 1 and 4 should not overlap (unless in a diagonal triangle) 3) Wave 2 and 4 should alternate (if one is complex, the other should be simple) Corrective Waves (waves two and 4 and A-B-C) can take many forms but the most usual are: 1) 5-3-5 (Zig-Zag) 2) 3-3-5 (Flat) 3) 3-3-3-3-3 (Flat) 4) Double and triple threes (combined structures) |
Elliott Wave Articles: Basic Elliottwave Theory Elliottwave Theory Elliott Wave Theory Basics Elliott Wave Chart Patterns Momentum Trading Forex Swing Trading with Elliottwave Technical Analysis of Elliottwave Dow Theory, Cycles, News & Random Walk Elliottwave - The Theory Elliottwave Principle on Wiki Elliottwave Rules & Guidelines |
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