The Basics of Elliott Wave Theory
Results 1 to 10 of 10

Thread: The Basics of Elliott Wave Theory

  1. #1
    Elliott Wave Theory Basics

    R. N. Elliott developed his wave theory in 1934. It's a method for describing stock market moves.

    Elliott Wave Technical Analysis guidelines and rules applied to the charts, and can enable you to trade and invest successfully through a better Comprehension of the market to maximize opportunity and minimize risk.

    Under the Elliott Wave Principle, each market decision is equally produced by meaningful information and generates meaningful information. Each trade, while at once a result, enters the cloth of the market and, by communiing transactional data to shareholders, joins the chain of causes of others' behavior.

    According to the Elliott Wave Theory, stock prices often move at a predetermined number of waves. Elliott believed that the market moved in five distinct waves on the upside (Motive or even Impulse Wave) and also three distinct on the downside (Corrective Wave).

    Motive wave structure is denoted by amounts (1-2-3-4-5) and, corrective wave structure is denoted by letters (a-b-c).

    Market cycles are composed of Motive Wave and Corrective Wave, Thus one complete cycle consists of eight waves.


    Figure 1
    Elliott Wave counting and degrees

    An important feature of Elliott Wave Theory is that they are fractal in character. 'Fractal' means market structure is built from comparable patterns on scales that are smaller or larger. Therefore, we can count the tide on a market chart in addition to short-term hourly market chart.


    Figure Two
    Elliot Wave theory egorizes waves with comparative size, or degree. Elliott picked the titles listed below to tag these degrees, from largest to smallest, and discerned nine degrees of waves: Grand Supercycle Supercycle Cycle Primary Intermediate Minor Minute Minuette Sub-Minuette The major waves determine the major tendency of the market, and waves determine minor tendencies.

    Rules for Wave Count

    Based on the market pattern, we can identify' where we are' in duration of tide count. But as the market pattern is relatively simplistic, there are several principles for valid counts: Wave 2 shouldn't break beneath the beginning of Wave 1; Wave 3 must not be the shortest tide among Wave 1, 5 and 3; Wave 4 shouldn't overlap with Rainbow 1, except for wave 5, 1, a or c of a greater degree. Rule of Alternation: 4 and Wave 2 must unfold in two wave forms.

  2. #2
    1 question I NEVER seem to find answers to in all videos and articles I've read concerning the Elliot wave theory is... HOW DO I IDENTIFY THE ORIGIN OF THE WAVES??? I mean... how do I draw or rely on the waves? Where do I start from? How do I know where to begin from? I've seen instances on charts but no one seems to explain why they chose points as the origin of the 1st wave.

    So could someone please explain me this? I understand quite a bit about the Elliot wave theory today, but all that comprehension is USELESS cos I still can't use.

    a little help PLEASE

  3. #3
    Guys, I am admittedly new to EWT.

    Any suggestions would be very much valued.

    Can anyone help identify exactly what wave we're in now?

    Is this some sort of extension. Are we in a new downward quickly primary bearish wave pattern?

  4. #4
    Quote Originally Posted by ;
    one question I NEVER look to find answers to in most videos and articles I have read about the Elliot wave theory is... HOW DO I IDENTIFY THE ORIGIN OF THE WAVES??? I mean... how do I draw or rely on the waves? Where do I start from? How do I know where to start from? I have seen instances on charts but no one seems to describe why they chose points since the origin of the 1st wave.

    So could someone please explain this to me? I know quite a bit about the Elliot wave theory today, but that knowledge is USELESS cos I can't apply...
    Any feeback from above question?

  5. #5
    Kheme,

    dependent on the functions of Glenn Neely, the Dow count began in 1765:

    http://www.neowave.com/info-past-interview.asp

    Assess the HISTORIC Archives section and at the Article section the
    Cycles Magazin from 1988 especially.

  6. #6
    Quote Originally Posted by ;
    kheme,

    Depending on the Functions of Glenn Neely, the Dow count started in 1765:

    http://www.neowave.com/info-past-interview.asp

    Assess the HISTORIC Archives Segment and at the Article Segment the
    Cycles Magazin from 1988 especially.

    Sixer
    From wikipedia:
    The Dow Jones Industrial Average was set by Charles Dow on May 26, 1896, also represented the dollar average of 12 stocks from leading American industries. Formerly in 1884, Mr. Dow had composed a first stock average called the Dow Jones Averages, which comprised nine railroads and two industrial businesses that appeared in the Customer's Afternoon Letter, a daily two-page fiscal news bulletin which was the precursor to The Wall Street Journal.

    How could the count start in 1765?

  7. #7
    Does this seem about perfect? My first time working with the wave concept....

    http://content.screencast.com/users/...53.19 PM.png

  8. #8

  9. #9
    Hi guys,

    that is my first time attempting to understand Elliot wave. I submitted my chart. Could someone see if this is accurate and have a peek at it? Or have Violated one of the rules for wave counting?

    Wave 4 should not overlap with Wave 1, except for wave 1, 5, 5, a or c of a higher level

  10. #10

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •  
This website uses cookies
We use cookies to store session information to facilitate remembering your login information, to allow you to save website preferences, to personalise content and ads, to provide social media features and to analyse our traffic. We also share information about your use of our site with our social media, advertising and analytics partners more information