đź“ŤPart #1, Elliott Waves: "Introduction. Classification".
Updated
Hello!
Dear colleagues, because I am constantly analyzing the markets with the help of wave analysis. Many colleagues ask me about it and I decided to make some tutorial posts to help you in this difficult task.
I want to present this information to you in a simple and straightforward manner.
Well, enough unnecessary text, let's get started!
A bit of history from Wikipedia.
Ralph Nelson Elliott (1871-1948), an American accountant, developed a model for the underlying social principles of financial markets by studying their price movements, and developed a set of analytical tools in the 1930s. He proposed that market prices unfold in specific patterns, which practitioners today call Elliott waves, or simply waves.
Elliott stated that "because man is subject to rhythmical procedure, calculations having to do with his activities can be projected far into the future with a justification and certainty heretofore unattainable."
In simple words, human behavior is quite predictable. And since it is mostly people who trade on the markets, we can predict its movement with some probability.
Well. Let's explore what these waves are.
Let's start by categorizing them.
The movements are mostly carried out by a five-wave structure.
đź“ŤModes: Motive & Corrective
Waves unfold in two distinct forms: motive and corrective. Motive waves exhibit a five-wave structure, featuring both a five-wave model and its co-directional components—waves 1, 3, and 5. The term "motive" is attributed to this structure due to its inherent ability to energize and set the market in motion. On the other hand, corrective waves, prevalent in countertrend movements, follow a three-wave structure or its variations. The name "corrective" stems from their nature as responses to preceding motive waves, executing partial retracements or "corrections" of the prior progress. Hence, these two wave types stand apart not only in their roles but also in their fundamental construction.
đź“ŤStyles: Impulse & Diagonal.
There are two types of motive waves: impulse and diagonal. As a rule, they alternate in the position of waves 1-5 impulses and waves A-C of the zigzag.
đź“ŤPatterns: Impulse, Leading Diagonal & Ending Diagonal
Five-wave action model. Creates forward progress.Motive waves are limited to three patterns: Impulse, Leading and Ending Diagonals.
đź“ŤGroups: Simple & Combined
The corrective mode has two groups, simple and combined. Combined corrections are subdivided into simple corrective structures.
The group of simple corrections includes: flat, triangle and single zigzag. Combined group — multiple zigzag and combination.
đź“ŤStyles: Sharp & Sideways
There are two styles of corrective processes: sharp and sideways. If wave two of an impulse is a sharp correction, expect wave four to be a sideways correction, and vice versa.
đź“ŤPatterns: Flat, Triangle, Single Zigzag, Multiple Zigzag and Combinationđź“Ť
Three-wave or five-wave (which have characteristics of both fives and threes) or their combination model of counteraction. Always produces a net retracement from the previous wave.
Corrective patterns include: single and multiple zigzags, triangle, flat, combination.
đź“ŤDivergences in Elliott Wave patterns manifest in two conditional categories: variations in form and variations in the quantity of simple structures. Impulses, diagonals, flats, triangles, and single zigzags are distinguished by the proportional length of their sub-waves, shaping the model uniquely. On the other hand, combined corrections, incorporating multiple zigzags and combinations, maintain a consistent shape, and their identification is based on the count of simple corrective structures they encompass.
This was an introductory lesson on Elliott waves. Further we will examine each type and subspecies of waves in detail in a separate lesson!
đź””Click on the links below this lesson!đź””
Dear colleagues, because I am constantly analyzing the markets with the help of wave analysis. Many colleagues ask me about it and I decided to make some tutorial posts to help you in this difficult task.
I want to present this information to you in a simple and straightforward manner.
Well, enough unnecessary text, let's get started!
A bit of history from Wikipedia.
Ralph Nelson Elliott (1871-1948), an American accountant, developed a model for the underlying social principles of financial markets by studying their price movements, and developed a set of analytical tools in the 1930s. He proposed that market prices unfold in specific patterns, which practitioners today call Elliott waves, or simply waves.
Elliott stated that "because man is subject to rhythmical procedure, calculations having to do with his activities can be projected far into the future with a justification and certainty heretofore unattainable."
In simple words, human behavior is quite predictable. And since it is mostly people who trade on the markets, we can predict its movement with some probability.
Well. Let's explore what these waves are.
Let's start by categorizing them.
The movements are mostly carried out by a five-wave structure.
đź“ŤModes: Motive & Corrective
Waves unfold in two distinct forms: motive and corrective. Motive waves exhibit a five-wave structure, featuring both a five-wave model and its co-directional components—waves 1, 3, and 5. The term "motive" is attributed to this structure due to its inherent ability to energize and set the market in motion. On the other hand, corrective waves, prevalent in countertrend movements, follow a three-wave structure or its variations. The name "corrective" stems from their nature as responses to preceding motive waves, executing partial retracements or "corrections" of the prior progress. Hence, these two wave types stand apart not only in their roles but also in their fundamental construction.
Motive
đź“ŤStyles: Impulse & Diagonal.
There are two types of motive waves: impulse and diagonal. As a rule, they alternate in the position of waves 1-5 impulses and waves A-C of the zigzag.
đź“ŤPatterns: Impulse, Leading Diagonal & Ending Diagonal
Five-wave action model. Creates forward progress.Motive waves are limited to three patterns: Impulse, Leading and Ending Diagonals.
Corrective
đź“ŤGroups: Simple & Combined
The corrective mode has two groups, simple and combined. Combined corrections are subdivided into simple corrective structures.
The group of simple corrections includes: flat, triangle and single zigzag. Combined group — multiple zigzag and combination.
đź“ŤStyles: Sharp & Sideways
There are two styles of corrective processes: sharp and sideways. If wave two of an impulse is a sharp correction, expect wave four to be a sideways correction, and vice versa.
đź“ŤPatterns: Flat, Triangle, Single Zigzag, Multiple Zigzag and Combinationđź“Ť
Three-wave or five-wave (which have characteristics of both fives and threes) or their combination model of counteraction. Always produces a net retracement from the previous wave.
Corrective patterns include: single and multiple zigzags, triangle, flat, combination.
Variations
đź“ŤDivergences in Elliott Wave patterns manifest in two conditional categories: variations in form and variations in the quantity of simple structures. Impulses, diagonals, flats, triangles, and single zigzags are distinguished by the proportional length of their sub-waves, shaping the model uniquely. On the other hand, combined corrections, incorporating multiple zigzags and combinations, maintain a consistent shape, and their identification is based on the count of simple corrective structures they encompass.
This was an introductory lesson on Elliott waves. Further we will examine each type and subspecies of waves in detail in a separate lesson!
đź””Click on the links below this lesson!đź””
Note
Dear colleagues, the first lesson was met with warm feedback! Thank you for your support! I would like to make an announcement and announce the release dates of the next parts of the Ralph Nelson Elliott Wave Analysis training:
đź“Ť03/16/2024. Part 2. Motive Waves - Impulse.
đź“Ť03/23/2024. Part 3. Motive Waves - Leading & Ending Diagonals.
đź“Ť03/30/2024. Part 4. Corrective Waves - Simple - Sharp Corrections.
đź“Ť04/06/2024. Part 5. Corrective Waves - Simple - Sideways corrections.
đź“Ť04/13/2024. Part 6. Corrective Waves - Combined - Sharp Corrections.
đź“Ť04/20/2024. Part 7. Corrective Waves - Sideways corrections.
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Stay tuned for more updates‼️
"And may the Great Profit be with us"
With love, Hellena ❤️
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Note
Next lecture! Click on the picture!đź“Ť03/16/2024. Part 2. Motive Waves - Impulse.
Note
Next lecture! Click on the picture!đź“Ť03/23/2024. Part 3. Motive Waves - Leading & Ending Diagonals.
Note
Next lecture! Click on the picture!đź“Ť03/31/2024. Part 4. Corrective Waves - Simple - Sharp Corrections.
Note
Next lecture! Click on the picture!đź“ŤPart 5: Corrective Waves - Simple - Triangle.
Note
Next lecture! Click on the picture!đź“ŤPart #6, FLAT - Corrective Waves-Simple-Sideways corrections.
Note
Next lecture! Click on the picture!đź“ŤPart #7, Multiple Zigzag - Corrective Waves - Combined.
Note
Next lecture! Click on the picture!đź“ŤPart # 8, Combination - Corrective Waves.
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