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Elliott wave analysis

Elliott Wave analysis what is it?

 

Predict Market Direction.

Identify turning points.

Provide Guidance for Entering and Exiting Positions.

In the pictures below the description of the complete market cycle.

 

Elliott Wave the complete market cycle


 

MOTIVE WAVES

Key Characteristics

. Five-wave structures, numbered 1-5

. In the direction of the main trend of one larger degree

. Wave 2 cannot retrace more than 100% of wave 1

. Wave 3 can never be the shortest and is often the

longest

Elliott Wave Cycle: Impulse wave
Elliott Wave Cycle: Impulse wave

 

EXTENSIONS

Key Characteristics

. Elongated impulse wave

. Appears in either wave 1, 3 or 5

. Often seen in wave 3 for the stock market

. Often seen in wave 5 in commodities

MOTIVE WAVES

Five-Wave Structures

. Impulse

1. Extensions

2. Truncations

. Diagonal Triangles

IMPULSE WAVES

Key Characteristics

. Wave 4 never enters the price territory of wave 1.

. Actionary waves 1, 3 and 5 are motive waves.

. Wave 3 is always an impulse wave.

Elliott Wave Cycle: Extension
Elliott Wave Cycle: Extension
Elliott Wave Cycle: Extension
Elliott Wave Cycle: Extension

 

TRUNCATIONS

Key Characteristics

. Wave 5 does not exceed the end of wave 3

. Contains necessary five subwaves

. Often occurs after a strong third wave

Elliott Wave Cycle: Truncation
Elliott Wave Cycle: Truncation

 

DIAGONAL TRIANGLES

Key Characteristics

. Wave 4 almost always moves into the price

territory of wave 1

. Waves 1, 3 and 5 are composed of three

subwaves, not five

. Found at termination points of larger pattern,

indicating exhaustion of larger pattern

. Normally has wedge shape within two

converging lines

Elliott Wave Cycle:Diagonal Triagles
Elliott Wave Cycle:Diagonal Triagles

 

Elliott Analisys is:

The Wave Principle = Graphic of Mass Psychology

Motive Waves = 5 Wave Structures, Main Trend of One Larger Degree

Types of Motive Waves = Impulse, Diagonal Triangle

Impulse:Waves 1, 3, 5 = 5 Impulse Subwaves

(Extensions, Truncations)

Wave 4 ≠ Price Territory of Wave 1

Diagonal Triangle: Waves 1, 3, 5 = 3 Subwaves

Wave 4 = Price Territory of Wave 1

Signal = Imminent Major Trend Reversal

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