Demonstration of Elliott Wave Principles using Bitcoin chart:
Rules:
Guidelines:
Relations with Fib ratios:
Rules:
- Wave 2 never goes below end of Wave 1 => checked
- Wave 3 is not the shortest of Wave 1, 3 and 5 => checked
- Wave 4 never goes below end of Wave 1 => checked
Guidelines:
- Guideline of Alternation: Wave 2 and 4 alternates in form (sharp vs sideways), retracement (shallow vs deep) and duration (long vs short) => checked
- Guideline of Wave Equality: Two out of three waves (1,3 and 5) tend to be equal in length and duration, Wave 1 and 5 meeting this guideline => checked
- Momentum is highest during end of wave 3, end of Wave 5 normally creates divergence with price => checked
- Volume during Wave 3 is normally the highest amongst Wave 1,3 and 5
Relations with Fib ratios:
- Wave 2 retraced Wave 1 by 78.6% (deep)
- Wave 3 was equal to 261.8% of Wave 1 (longest)
- Wave 4 retraced Wave 3 by 38.2% (shallow)
- Wave 5 was equal to 100% of Wave 1 (Guideline of Wave equality)
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.