Elliott's Waves and Figures: A complementar approach
Some traders, when approaching Elliott wave analysis, abandon the price analysis through technical figures, wrongly.
I, on the other hand, believe that the two must be complementary, as I will demonstrate in this article.
When the ancient navigators navigated the lands and the seas, they were always looking for the stars, so that they could guide them. They had reference points and, thanks to them, they were able to reach the desired destination.
Anyone who has studied the principles of Elliott's waves knows very well that these "guidelines" allow us to grasp the direction of the market thanks to the fact that investors, as human beings, reflect their repetitive nature on the markets and, ultimately , determine the final forms.
Within this analysis of the waves, the figures of technical analysis could be sought to allow us to have a point of reference. On the other hand, if it is true that wave theory is able to explain every market movement, then the same figures of technical analysis will be nothing but movements that can be interpreted through Elliott's theory.
Let's take the flag: the flag, analyzed from a "wave" point of view, can very well be seen as a zig zag, followed by a triangle and, finally, by another zig zag.
Rectangles are usually double three or triple three.
Double highs are generally caused by flat, double lows by truncated 5 waves.
A head and shoulders can be seen as a normal high of elliot, while a head and shoulders that doesn't work could mean a flat expandend.
So, when we study the market through Elliott waves, the search for these figures allows us to have a point of reference and, ultimately, to orient ourselves. If we find a flag, we know we are in a reactive phase. So, if the flag overall turns out to be a bull move, then we know that the motive move is bear.
So ... always find points of reference. Look for your stars!
I, on the other hand, believe that the two must be complementary, as I will demonstrate in this article.
When the ancient navigators navigated the lands and the seas, they were always looking for the stars, so that they could guide them. They had reference points and, thanks to them, they were able to reach the desired destination.
Anyone who has studied the principles of Elliott's waves knows very well that these "guidelines" allow us to grasp the direction of the market thanks to the fact that investors, as human beings, reflect their repetitive nature on the markets and, ultimately , determine the final forms.
Within this analysis of the waves, the figures of technical analysis could be sought to allow us to have a point of reference. On the other hand, if it is true that wave theory is able to explain every market movement, then the same figures of technical analysis will be nothing but movements that can be interpreted through Elliott's theory.
Let's take the flag: the flag, analyzed from a "wave" point of view, can very well be seen as a zig zag, followed by a triangle and, finally, by another zig zag.
Rectangles are usually double three or triple three.
Double highs are generally caused by flat, double lows by truncated 5 waves.
A head and shoulders can be seen as a normal high of elliot, while a head and shoulders that doesn't work could mean a flat expandend.
So, when we study the market through Elliott waves, the search for these figures allows us to have a point of reference and, ultimately, to orient ourselves. If we find a flag, we know we are in a reactive phase. So, if the flag overall turns out to be a bull move, then we know that the motive move is bear.
So ... always find points of reference. Look for your stars!
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.