The Breakout! With The Easiest Chart Thank you for taking your time to watch this video and if you enjoyed it, Please feel free to ask any question in the comments and leave a like!
Elliotwaveanalysis
if you use technical analysis you owe a lot to these individualsTHE HISTORY AND ORIGIN OF TECHNICAL ANALYSIS
I am a firm believer that as investors/traders we need to know the historic and major events that have occurred in this magnificent field of ours that have shaped how it is today.
Today i want to shed light of knowledge on the history/origin of technical analysis as this is a widely used concept that is used by majority of traders/investors to analyse/predict future market moves through the evaluation of historic market data especially price, volume and implied volatility and many have made a living and good returns on the financial markets using the various technical analysis tools and concepts but not knowing where it all started.
many do believe that technical analysis was initiated by Charles Dow in the 1800s but this is not true as evidence of Technical Analysis dates far back as to the 17th century from basic and underdeveloped methods as compared to the more evolved ones used in Morden-day times.
Let's get straight into it:
17th CENTURY
-- 1. the Dutch east India Company traders
The Dutch East India Company which was formed in the Dutch Republic, Amsterdam in 1602 which is known to be the first publicly traded company, trading mainly in spices, Indigo and cotton, which gave way to the first financial market the Amsterdam Stock Exchange. Here is when the earliest forms of technical analysis came to show when the Dutch traders would graph record/keep track of the various price fluctuations of their stock but in a basic form.
2. José or Joseph Penso de la Vega
still in the 17th century a Spanish diamond merchant, philosopher and poet best known also as Joseph de la Vega, born 1650 in Spain also considered one of the earliest financial market expert published a marvellous financial read called "Confusion De Confusiones" which provided detailed awareness of how the Dutch financial market participants operated focusing on their illogical behaviour and price patterns they used further more hinting on technical analysis with his descriptions of technical analysis concepts such as puts, calls and pools which are still relevant in Morden-day technical analysis and how he used these in the Amsterdam Stock Exchange.
18th CENTURY
Homma Munehisa
Homma Munehisa, born 1724 in Sakata, Japan a Japanese rice merchant trading in Dōjima Rice Exchange developed what i consider the most popular form of technical analysis which proved high standards of acceptance as traders/investors world-wide still use it in modern-day times, he initiated the Japanese Candlestick/ K-Line (primarily known as Sakata Charts), which is a price chart that's represents the open, close, high and low prices of a security for a specific time period which was introduced in his book "THE FOUNTAIN OF GOLD- THE THREE MONKEY RECORD OF MONEY" which also shared insights about chart patterns, markets trends and traders human emotions.
LATE 19TH AND EARLY 20TH CENTURY
Charles Henry Dow
considered father of technical analysis born 1851 Charles Dow is the one that first to induct modern-day technical analysis in the United States Of America, he was an American journalist who co-founded Dow Jones and Company which is a publishing firm along ide Edward Davis Jones and Charles Bergstresser. He also co-founded The Wall Street Journal which its first publication was on July 8, 1889 which became the the most reputed financial publication and first of it's kind which was a series of texts that discussed his observations of the U.S stock market especially the industrial and transportation stocks listed in the U.S stock market this gave way to the Dow Jones Industrial Average and Dow Jones Transportation Average, he also held a strong believe that "the stock market as a whole was a reliable measure of overall business conditions within the economy"
he also developed the Dow Jones Theory which states that the market has 3 trend phases which was a significant breakthrough in technical analysis as this theory aids traders/investors in identifying the major, intermediate and minor trends in the market.
after his passing many other technical analysis developers came from studying his work/publications which include the likes of William Hamilton who later become the editor of the wall street journal, others notable followers of his work include Robert Rhea, George Shaefer and Richard Russel.
another prominent figure in the development of modern-day technical analysis is
Ralph Nelson Elliot
born 1871 whose financial career started as an accountant, Mr. Elliot was famously known for studying 75 years of historical stock market data and recording his research and findings manually as computerized systems where limited which i believe is very outstanding.
his work is based on a theory that market movements are not random and that the markets moves in specific trends and patterns (waves) which are influenced by traders/investors psychology.
his wave theory gained traction in March 13, 1935 when he stated that the the market will make a bottom and indeed the following trading day the Dow Jones Industrial Average made it's lowest closing price, which proved his Elliot Wave Theory to be a significant technical anaysis concept.
20th CENTURY
Technical Indicators
with the aid of computerized systems technical analysis evolved into technical indicators which are computer systems backed by mathematical calculations of price data which apply these calculations to analyse large volumes of market data incorporated by algorithms which overlap on charts to forecast future price movements.
hope you have a fun read and learned something new.
“In learning you will teach, and in teaching you will learn.”
Phil Collins
put together by Pako Phutietsile as @currencynerd
Spotting the Trend: The Birth of Wave 3Technical Analysis Using Elliott Wave Principles on exampled chart of SBI Cards (Daily Time Frame)
This analysis is for educational purposes only and is not intended as financial or trading advice. Market movements are inherently uncertain, and the analysis is based on one possible interpretation of the Elliott Wave structure. Please consult a financial advisor before making any trading or investment decisions.
Introduction to Elliott Wave Principles:
Elliott Wave Theory is an analytical framework that helps traders and investors understand market psychology through price movement patterns. The theory suggests that market prices unfold in waves, which are driven by collective investor behavior. The patterns consist of five waves in the direction of the main trend, followed by three corrective waves. Understanding these wave patterns allows us to anticipate future price movements with greater accuracy.
Key Elliott Wave Principles:
1. Five-Wave Impulse Pattern: The primary trend unfolds in five waves (1-2-3-4-5). Waves 1, 3, and 5 move in the direction of the trend, while waves 2 and 4 are corrective.
2. Three-Wave Corrective Pattern: After a five-wave sequence, a correction typically follows, consisting of three waves (A-B-C) that move against the primary trend.
3. Wave Relationships: Fibonacci ratios play a crucial role in Elliott Wave analysis, often governing the length of the waves.
4. Wave Characteristics: Each wave has its own set of characteristics. For example, Wave 3 is usually the most powerful, showing the strongest price movement, while Wave 5 may signal the final push before a significant correction.
Current Elliott Wave Analysis on SBI Cards
Wave Structure Overview:
- The analysis focuses on the daily time frame of SBI Cards, where we can identify a completed corrective pattern and the beginning of a new impulsive wave structure.
Wave Count Details:
1. Primary Count:
- The chart indicates the possible completion of Wave ((2)) in black, marked by a complex corrective structure, ending near the 493.30 level.
- The price has likely begun unfolding Wave ((i)) of Wave 1 in red of the larger Wave ((3)) in black.
2. Current Daily Structure:
- Wave ((2)) seems to have completed with a three-wave corrective move, labeled as A-B-C. The final wave C (marked in red) appears to have ended at 493.30, representing the termination point of Wave ((2)).
- Following this, the initial sub-waves of Wave 1 (red) have begun forming, with Wave ((i)) currently unfolding.
- The nearest Invalidation Level for this wave count is 647.95. A break below this level would invalidate the current count, requiring a re-evaluation.
Wave ((3)) Characteristics and Projections:
- Wave ((3)) Characteristics: As per Elliott Wave Theory, Wave ((3)) is often the most dynamic and extended wave, reflecting strong momentum in the direction of the main trend. It’s typically the longest and most powerful of the impulsive waves, often reaching or surpassing the 1.618 Fibonacci extension of Wave ((1)).
- Target Levels: For Wave ((3)) in black, potential targets could be calculated using Fibonacci extensions from Wave ((1)) & ((2)), projecting prices towards 161.80%, hear possibility for short to medium term could be 960.00 and beyond if Invalidation level is not Triggered, depending on the strength of the momentum.
- Invalidation Level: If the price drops below 647.95, it would invalidate the current wave count, indicating that Wave ((2)) may still be in progress or that an alternative structure is developing.
Conclusion:
The analysis suggests that SBI Cards may have completed a major corrective wave and is now in the early stages of a new impulsive sequence. The focus should be on the development of Wave ((3)) in black, which has the potential to drive prices significantly higher if the wave count holds true. As always, this educational analysis is not intended as trading advice, and one should consult with a financial advisor before making any investment decisions.
I am not Sebi registered analyst.
My studies are for educational purpose only.
Please Consult your financial advisor before trading or investing.
I am not responsible for any kinds of your profits and your losses.
Most investors treat trading as a hobby because they have a full-time job doing something else.
However, If you treat trading like a business, it will pay you like a business.
If you treat like a hobby, hobbies don't pay, they cost you...!
Hope this post is helpful to community
Thanks
RK💕
Disclaimer and Risk Warning.
The analysis and discussion provided on in.tradingview.com is intended for educational purposes only and should not be relied upon for trading decisions. RK_Charts is not an investment adviser and the information provided here should not be taken as professional investment advice. Before buying or selling any investments, securities, or precious metals, it is recommended that you conduct your own due diligence. RK_Charts does not share in your profits and will not take responsibility for any losses you may incur. So Please Consult your financial advisor before trading or investing.
Decoding the Final Wave: An Elliott Wave PerspectiveTechnical Analysis Using Elliott Wave Principles on example of Larsen & Toubro Ltd. (Hourly Time Frame)
The analysis presented is purely for educational purposes, demonstrating the application of Elliott Wave Theory. It is not intended as trading or investment advice. Markets are unpredictable, and all analyses have a degree of uncertainty.
Introduction to Elliott Wave Principles:
Elliott Wave Theory is a powerful tool used by traders and analysts to decipher the underlying structure of market price movements. Developed by Ralph Nelson Elliott, this theory is based on the idea that market prices unfold in specific patterns known as "waves." These waves are driven by collective investor psychology, moving in predictable cycles of optimism and pessimism. The theory is broken down into two main phases: the impulsive phase, which moves in the direction of the main trend, and the corrective phase, which moves against it.
Key principles to remember:
1. Wave Structure: An impulsive wave (motive wave) consists of five waves (1-2-3-4-5) in the direction of the trend. A corrective wave is composed of three waves (A-B-C) that move against the trend.
2. Wave Personality: Each wave within the Elliott Wave structure has distinct characteristics. For example, Wave 3 is often the strongest and longest, while Wave 5 tends to be a final push before a trend reversal.
3. Wave Relationships: Fibonacci ratios are frequently observed in wave relationships, providing potential price targets and retracement levels.
4. Validation and Invalidation Levels: These levels help in determining the accuracy of wave counts and projections. If price breaches the invalidation level, the wave count is reassessed.
Current Elliott Wave Analysis on Larsen & Toubro Ltd.
Upon analyzing the hourly chart of Larsen & Toubro Ltd., we can observe the following wave counts and structures:
Wave Structure Overview:
- The chart shows a complex corrective structure following a significant impulsive move. The price action seems to be in the final stages of a larger wave pattern.
Wave Count Details:
1. Primary Count:
- We are potentially in the 5th Wave (red) of the final (5)th Wave (blue) on the daily time frame.
- The 5th wave, according to Elliott Wave Theory, often exhibits certain characteristics such as declining momentum, signaling the end of the trend.
2. Current Hourly Structure:
- Wave (4) in Blue has been completed at the price level near 3175.05, marking it as the last corrective wave before the final impulsive wave.
- The chart illustrates a five-wave sequence emerging from this level, indicative of the development of the 5th wave.
- Within this structure, we can identify sub-waves:
- Wave 1 peaked around 3720.
- Wave 2 retraced back near 3460.
- Wave 3 is anticipated to push towards higher levels, with Wave 4 and 5 completing the sequence.
Wave 5 Characteristics and Projections:
- Wave 5 Characteristics: [/i ] Typically, Wave 5 in a motive wave structure can be either strong and extended or show signs of divergence, where momentum indicators such as RSI or MACD might not confirm new highs.
- Projection Target Levels: Based on Fibonacci extensions, potential targets for Wave 5 lie around 4141.30, 4352.60, and even possibly towards 4400.00.
- Invalidation Level: If the price breaks below 3175.05, the wave count would be invalidated, necessitating a reassessment of the entire structure.
Conclusion:
The analysis indicates that Larsen & Toubro Ltd. is in the final stages of a larger wave pattern, specifically the 5th wave of an impulsive sequence. As this wave unfolds, it’s crucial to monitor the target and invalidation levels closely. This educational analysis serves to illustrate the application of Elliott Wave Theory, with no intention of providing trading advice. Always consider consulting with a financial advisor before making any investment decisions.
I am not Sebi registered analyst.
My studies are for educational purpose only.
Please Consult your financial advisor before trading or investing.
I am not responsible for any kinds of your profits and your losses.
Most investors treat trading as a hobby because they have a full-time job doing something else.
However, If you treat trading like a business, it will pay you like a business.
If you treat like a hobby, hobbies don't pay, they cost you...!
Hope this post is helpful to community
Thanks
RK💕
Disclaimer and Risk Warning.
The analysis and discussion provided on in.tradingview.com is intended for educational purposes only and should not be relied upon for trading decisions. RK_Charts is not an investment adviser and the information provided here should not be taken as professional investment advice. Before buying or selling any investments, securities, or precious metals, it is recommended that you conduct your own due diligence. RK_Charts does not share in your profits and will not take responsibility for any losses you may incur. So Please Consult your financial advisor before trading or investing.
Wave Theory in Motion: Understanding Key PatternsElliott Wave Analysis:
Example used chart of Eicher Motors (NSE: EICHERMOTORS)
This analysis is provided for educational purposes only and does not constitute trading or investment advice. All wave counts are subject to change as the market evolves. Always consult with a qualified financial advisor before making any trading decisions.
Overview:
In this analysis, we will delve into the current market structure of Eicher Motors through the lens of Elliott Wave Theory. The focus will be on identifying the wave count, potential price targets, and critical invalidation levels.
Wave Count:
Starting from the low at 4253, we have a clear impulsive structure labeled as wave (i). This wave consists of five smaller sub-waves, denoted by i, ii, iii, iv, v. The subsequent correction, wave (ii), retraced part of this impulsive move, unfolding in a typical corrective pattern, which then led to wave (iii). This wave extended higher, reflecting strong bullish momentum, followed by waves (iv) and (v) completing the impulsive sequence near 4976 where we had labelled as wave 3 completed.
From there, an Expanded Flat corrective structure began, identified as a ((a))-((b))-((c)) pattern, which seems to have completed near ₹4,548. This marks the end of wave 4, a corrective wave within a larger impulsive sequence. Currently, the stock appears to be in the early stages of a new impulsive wave, labeled as wave (i) of a higher-degree wave ((i)) of one more higher degree wave 5.
Elliott waves Theory based Target Assumptions:
Given that wave 3 of the previous impulsive move ended around 4976, we anticipate that wave 5 should extend beyond this level. The first target for wave 5 would be around 5000, If momentum is strong, we could see further extensions.
Invalidation Levels:
Critical to any Elliott Wave analysis is understanding where the wave count might be invalidated:
Nearest Invalidation Level: A break below 4548 would invalidate the assumption that wave (v) of wave C has completed. This would suggest that the corrective wave 4 is still ongoing or that a different corrective structure is forming.
Main Invalidation Level: Should the price fall below 4253.85, it would invalidate the entire bullish wave count, implying that a much larger corrective pattern is unfolding, or a change in the trend direction is occurring.
Conclusion:
Eicher Motors is showing signs of a potential new impulsive move to the upside, However, traders should keep a close eye on the invalidation levels at 4548 and 4253.85. Breaching these levels would require a reevaluation of the current wave structure and could signal a deeper correction.
I am not Sebi registered analyst.
My studies are for educational purpose only.
Please Consult your financial advisor before trading or investing.
I am not responsible for any kinds of your profits and your losses.
Most investors treat trading as a hobby because they have a full-time job doing something else.
However, If you treat trading like a business, it will pay you like a business.
If you treat like a hobby, hobbies don't pay, they cost you...!
Hope this post is helpful to community
Thanks
RK💕
Disclaimer and Risk Warning.
The analysis and discussion provided on in.tradingview.com is intended for educational purposes only and should not be relied upon for trading decisions. RK_Charts is not an investment adviser and the information provided here should not be taken as professional investment advice. Before buying or selling any investments, securities, or precious metals, it is recommended that you conduct your own due diligence. RK_Charts does not share in your profits and will not take responsibility for any losses you may incur. So Please Consult your financial advisor before trading or investing.
Understanding Complex Structures: Elliott Wave Theory in ActionTechnical Analysis on Exampled chart of RBL Bank Ltd. using Elliott Wave Theory
Understanding Complex Structures: Elliott Wave Theory in Action
This analysis uses Elliott Wave Theory & Structures, which involve multiple possibilities. The analysis presented focuses on one potential scenario. The provided information is for educational purposes only, not trading advice. There is a risk of being completely wrong, and users are warned not to trade or invest solely based on this study. The content is not advisory and does not guarantee profits. We are not responsible for any kind of profits and losses; individuals should consult a financial advisor before making any trading or investment decisions.
Elliott Wave Principles
Elliott Wave Theory, developed by Ralph Nelson Elliott, is a widely used method of technical analysis. It helps traders analyze financial market cycles and forecast market trends by identifying patterns of investor psychology, reflected in price movements. According to Elliott, market prices unfold in specific patterns, termed as "waves". These waves are categorized into:
Impulse Waves: Move in the direction of the overall trend and consist of five sub-waves.
Corrective Waves: Move against the trend and consist of three sub-waves.
Impulse waves are labeled as 1, 2, 3, 4, and 5, and corrective waves are labeled as A, B, and C. Complex corrections are labeled as W, X, Y, and sometimes Z.
Chart Analysis Exampled of RBL Bank Ltd.
Here's a breakdown of the wave counts as illustrated in the chart:
Impulse Wave 1 - 5 as a bigger degree wave (3)
- Starting from the bottom left, the stock initiates an upward movement labeled as waves (i), (ii), (iii), (iv), and (v), culminating in a larger degree Wave (3). This indicates a bullish impulse wave consisting of five sub-waves.
Corrective Wave W-X-Y Correction as a bigger degree Wave (4)
- The chart shows a complex correction starting from top of Wave (3) with set of double correction as wave W-X-Y
Current Market Scenario
- Currently, the stock appears to be completing another corrective wave (Y), marked with sub-waves (a), (b), and potentially completing (c). of wave ((y)) of larger degree wave Y to finish one more larger degree wave (4). Can show some Dips to complete wave (4) along with Bullish Divergences.
Future Projection
Based on the Elliott Wave count, the stock seems to be in the final stages of completing Wave (c) of ((y)) of Y of (4). After this correction, it is anticipated that a new impulsive wave cycle might begin, potentially forming Wave (5) of a larger degree. The projected target for this next upward wave, post-correction, could reach above the previous high near the 300 level or more.
By understanding these principles and analyzing the provided chart, traders can gain insights into potential market movements and make more informed trading decisions.
I am not Sebi registered analyst.
My studies are for educational purpose only.
Please Consult your financial advisor before trading or investing.
I am not responsible for any kinds of your profits and your losses.
Most investors treat trading as a hobby because they have a full-time job doing something else.
However, If you treat trading like a business, it will pay you like a business.
If you treat like a hobby, hobbies don't pay, they cost you...!
Hope this post is helpful to community
Thanks
RK💕
Disclaimer and Risk Warning.
The analysis and discussion provided on in.tradingview.com is intended for educational purposes only and should not be relied upon for trading decisions. RK_Charts is not an investment adviser and the information provided here should not be taken as professional investment advice. Before buying or selling any investments, securities, or precious metals, it is recommended that you conduct your own due diligence. RK_Charts does not share in your profits and will not take responsibility for any losses you may incur. So Please Consult your financial advisor before trading or investing.
Navigating the Waves: Elliott Wave Theory and Key IndicatorsEducational Technical Analysis on example chart of UFO Moviez India
Elliott Wave Analysis and Key Moving Averages
Disclaimer
This study is for educational purposes only and does not constitute trading or investment advice. The analysis presented focuses on one potential scenario based on Elliott Wave Theory and other technical indicators. Trading and investing involve substantial risk, and individuals should consult a financial advisor before making any decisions.
Introduction to Elliott Wave Theory
Elliott Wave Theory is a form of technical analysis that traders use to analyze financial market cycles and forecast market trends by identifying extremes in investor psychology, highs and lows in prices, and other collective activities. The theory posits that stock prices move in predictable patterns or "waves" based on investor sentiment.
Principles of Elliott Wave Theory
1. Wave Patterns: According to Elliott, market prices move in five waves in the direction of the main trend (impulse waves) and three waves in a correction against the main trend (corrective waves).
2. Wave Degrees: Waves are fractal in nature, meaning that smaller waves form part of larger waves, and this pattern repeats on all time frames.
3. Wave Characteristics:
- Wave 1: Usually the smallest impulse wave.
- Wave 2: Corrects Wave 1 but does not exceed its starting point.
- Wave 3: Typically the strongest and longest wave.
- Wave 4: Corrective wave that is usually less severe.
- Wave 5: Final leg in the direction of the main trend.
Current Analysis of example chart of UFO Moviez India
Based on the chart and Elliott Wave Theory, UFO Moviez India is currently suggesting an impulsive and momentum-driven 3rd of the 3rd wave ahead, with an invalidation level at 106.
Key Observations:
1. Wave Count:
- Wave (1): An initial 5-wave impulse has completed.
- Wave (2): A corrective ABC pattern.
- Wave (3): Currently unfolding with sub-waves i, ii, iii, iv, and v marked.
- Wave 3: In the larger context is forming.
2. Breakout:
- There is a breakout above the downward trendline with good volumes, indicating strong bullish momentum.
3. Key Moving Averages:
- Price Trading Above:
- 50 EMA, 100 EMA, and 200 EMA
- 50 WEMA, 100 WEMA, and 200 WEMA
- Crossed above 20 MMA
Technical Indicators and Levels
- Price: 148.54 INR (as of the latest close)
- Support Levels:
- Nearest Invalidation Level: 106 INR
- Major Support: 57.20 INR
- Resistance Levels:
- Immediate Target: 175.58 INR (Wave 1 of larger degree)
- Fibonacci Extension Target: 220.51 INR (1.618 extension of Wave 1)
Conclusion
The Elliott Wave analysis of example chart of UFO Moviez India indicates a potentially strong bullish trend as the stock is in the 3rd wave of a larger impulse. The breakout above the trendline with significant volume further supports this bullish outlook. However, it is crucial to monitor the invalidation level at 106 INR, as a break below this level could invalidate the current wave count and suggest a different scenario.
Educational Purpose Notice
This analysis is provided for educational purposes only. It is not an investment or trading advice or tip. Trading and investing in financial markets involve risk, and it is important to do thorough research and consult with a financial advisor before making any investment decisions.
I am not Sebi registered analyst.
My studies are for educational purpose only.
Please Consult your financial advisor before trading or investing.
I am not responsible for any kinds of your profits and your losses.
Most investors treat trading as a hobby because they have a full-time job doing something else.
However, If you treat trading like a business, it will pay you like a business.
If you treat like a hobby, hobbies don't pay, they cost you...!
Hope this post is helpful to community
Thanks
RK💕
Disclaimer and Risk Warning.
The analysis and discussion provided on in.tradingview.com is intended for educational purposes only and should not be relied upon for trading decisions. RK_Charts is not an investment adviser and the information provided here should not be taken as professional investment advice. Before buying or selling any investments, securities, or precious metals, it is recommended that you conduct your own due diligence. RK_Charts does not share in your profits and will not take responsibility for any losses you may incur. So Please Consult your financial advisor before trading or investing.
Mastering Elliott Waves: Key Rules You Can't IgnoreEducational Idea : Understanding Key Principles of Elliott Wave Theory
Introduction
Elliott Wave Theory is a powerful tool used by traders to analyze market cycles and forecast future price movements. Understanding its core principles can help you make more informed trading decisions. In this article, we will delve into three fundamental principles of Elliott Wave Theory that cannot be violated. Remember, this video is purely for educational purposes and not intended as trading advice or tips.
1. Wave 2 Can Never Retrace More Than 100% of Wave 1
The first principle of Elliott Wave Theory is that Wave 2 can never retrace more than 100% of Wave 1. In other words, Wave 2 cannot go below the starting point of Wave 1. If it does, it invalidates the wave count and suggests that the initial impulse wave (Wave 1) was incorrectly identified. This rule ensures that Wave 2 is a correction wave within the larger trend and not a reversal of the trend itself.
Example Illustration:
- If Wave 1 starts at 100 and peaks at 150, Wave 2 can retrace to any level above 100, but not below it.
2. Wave 3 Can Never Be the Shortest Among All Three Impulse Waves (1-3-5)
The second principle states that Wave 3 can never be the shortest among the three impulse waves (Waves 1, 3, and 5). Typically, Wave 3 is the longest and most powerful wave, characterized by strong momentum and volume. If you find that Wave 3 is shorter than either Wave 1 or Wave 5, the wave count is incorrect, and you need to re-evaluate your analysis.
Example Illustration:
- If Wave 1 is 50 points and Wave 3 is only 30 points, while Wave 5 is 40 points, this violates the rule as Wave 3 is the shortest.
3. Wave 4 Cannot Enter the Territory of Wave 1 (Except in Diagonals & Triangles)
The third principle asserts that Wave 4 cannot enter the price territory of Wave 1. This means that the lowest point of Wave 4 should not overlap the highest point of Wave 1. An exception to this rule occurs in diagonal and triangle patterns, where some overlap is permissible. This rule helps maintain the integrity of the impulse wave structure.
Example Illustration:
- If Wave 1 peaks at $150 and Wave 4 retraces to $145, this overlaps and invalidates the wave count unless the pattern is a diagonal or triangle.
Conclusion
By following these principles, you can ensure that your Elliott Wave analysis remains robust and accurate, helping you navigate the complexities of the financial markets with greater confidence. Understanding and applying these key principles of Elliott Wave Theory can significantly enhance your market analysis and trading strategies. Keep these rules in mind as you study and apply Elliott Wave Theory in your trading journey. Remember, this video is purely for educational purposes and not any kind of trading advisory or tips.
This content is for educational purposes only and should not be considered as financial advice. Always do your own research before making any trading decisions.
I am not Sebi registered analyst.
My studies are for educational purpose only.
Please Consult your financial advisor before trading or investing.
I am not responsible for any kinds of your profits and your losses.
Most investors treat trading as a hobby because they have a full-time job doing something else.
However, If you treat trading like a business, it will pay you like a business.
If you treat like a hobby, hobbies don't pay, they cost you...!
Feel free to share your thoughts or questions in the comments below. Happy trading!
Hope this post is helpful to community
Thanks
RK💕
Disclaimer and Risk Warning.
The analysis and discussion provided on in.tradingview.com is intended for educational purposes only and should not be relied upon for trading decisions. RK_Charts is not an investment adviser and the information provided here should not be taken as professional investment advice. Before buying or selling any investments, securities, or precious metals, it is recommended that you conduct your own due diligence. RK_Charts does not share in your profits and will not take responsibility for any losses you may incur. So Please Consult your financial advisor before trading or investing.
Charting the Future: An Elliott Wave ApproachTechnical Analysis of Rajesh Exports Using Elliott Wave Theory
Monthly Time Frame Analysis
Elliott Wave Count and Structure:
- The monthly chart of Rajesh Exports shows a clear Elliott Wave pattern, suggesting the completion of a corrective wave (C) of a larger degree wave ((2)) in Black, implying that a new bullish impulse is likely to begin wave ((3)) in Black.
- The recent price action indicates the end of Wave (C), part of a larger correction that followed a significant impulse wave (5) earlier of wave ((1)) in Black.
- This suggests that the stock is about to start a new bullish cycle, labeled as Wave (1) in Blue of a new impulse higher Primary degree wave ((3)) in Black.
Bullish Divergence:
MACD: The price shows hidden bullish divergence with the MACD, as the MACD line forms higher lows while the price makes lower lows on Monthly time frame.
RSI: Similar hidden bullish divergence is observed with the RSI too on monthly time frame, reinforcing the bullish outlook.
Daily Time Frame Analysis
Bullish Divergence:
MACD: The price shows bullish divergence with the MACD, with the MACD line forming higher lows while the price forms lower lows.
RSI: The RSI also shows bullish divergence, adding further weight to the bullish scenario.
Trigger Point:
Trendline Breakout:
The daily chart indicates a trendline breakout accompanied by a significant increase in volume. This breakout suggests a strong bullish sentiment and confirms the start of a new upward trend.
Invalidation Level:
The invalidation level for this bullish scenario is set at 261. If the price falls below this level, the bullish wave count would be invalidated.
Targets:
According to Elliott Wave Theory, the third wave (3) is typically the most powerful. Using the Fibonacci extension, the 161.8% target of Wave (1) places the possible price target near or above 1800.
Summary
Elliott Wave Count: Indicates a potential start of a new bullish impulse wave.
Bullish Divergence: Both MACD and RSI on the daily and monthly charts show bullish divergence.
Trendline Breakout: Confirmed with high volume, suggesting strong upward momentum.
Invalidation Level: 261
Target: 161.8% Fibonacci extension of Wave (1) projects a target near or above 1800.
The overall analysis suggests that Rajesh Exports is poised for a significant upward movement, with strong bullish indications from both the Elliott Wave counts and technical indicators.
I am not Sebi registered analyst.
My studies are for educational purpose only.
Please Consult your financial advisor before trading or investing.
I am not responsible for any kinds of your profits and your losses.
Most investors treat trading as a hobby because they have a full-time job doing something else.
However, If you treat trading like a business, it will pay you like a business.
If you treat like a hobby, hobbies don't pay, they cost you...!
Hope this post is helpful to community
Thanks
RK💕
Disclaimer and Risk Warning.
The analysis and discussion provided on in.tradingview.com is intended for educational purposes only and should not be relied upon for trading decisions. RK_Charts is not an investment adviser and the information provided here should not be taken as professional investment advice. Before buying or selling any investments, securities, or precious metals, it is recommended that you conduct your own due diligence. RK_Charts does not share in your profits and will not take responsibility for any losses you may incur. So Please Consult your financial advisor before trading or investing.
Charting with Elliott Waves & Technical AnalysisUnderstanding how to do Technical Analysis of any chart based on Elliott Waves
This analysis is for educational purposes only and should not be considered as trading advice. Multiple scenarios are possible in the real market, and there is a risk of being wrong. It is essential to consult with a financial advisor before making any trading or investment decisions. We are not responsible for any profits or losses incurred based on this analysis.
Wave Rules:
Wave 2 cannot retrace more than 100% of Wave 1.
Wave 3 is never the shortest wave.
Wave 4 should not overlap with Wave 1's price territory, except in diagonal triangles.
Applying Elliott Wave Theory
Elliott Wave Theory is a powerful tool for traders, but it requires practice and a deep understanding of market psychology. By analyzing wave patterns, degrees, and Fibonacci relationships, traders can gain insights into potential market trends and make informed trading decisions. It is important to combine Elliott Wave analysis with other technical indicators and risk management strategies to enhance the accuracy and reliability of market forecasts.
Elliott Wave Theory provides a comprehensive framework for understanding market cycles and predicting price movements. By mastering its principles and applying them with discipline, traders can enhance their ability to navigate the financial markets and capitalize on emerging trends.
Let's understand study of this chart
Elliott Wave Analysis:
The chart represents the Possible Elliott Wave counts for TATA STEEL, currently indicating the completion and projection of waves within an impulsive structure.
Wave Count Overview:
The chart demonstrates a five-wave impulsive structure labeled as:
Wave (i), Wave (ii), Wave (iii), Wave (iv), Wave (v)
The blue zone highlights a previous resistance area, which is now acting as a potential support zone.
The current wave structure projects wave (v) of ((v)).
Invalidation Level:
The nearest invalidation level for this wave count is at 155.00. A drop below this level would invalidate the current wave count.
Potential Targets:
The projected target for wave (v) of ((v)) is around level of 184.60 & more.
This target is derived from typical characteristics of the fifth wave in Elliott Wave Theory, often extending to new highs before the completion of the impulse wave.
Elliott Wave Principles and Characteristics of Wave (v):
Elliott Wave Theory posits that market prices move in repetitive cycles, consisting of five waves in the direction of the main trend (impulse waves) and three corrective waves.
Wave (v) in an impulse sequence is typically the final wave of the trend and often displays characteristics such as:
Completing the overall five-wave pattern.
Extending beyond the previous high of wave (iii).
Exhibiting momentum divergences (where price makes a new high but momentum indicators do not).
Sometimes driven by fundamental news or events, leading to sharp price movements.
Key Levels to Watch:
Current Price: 160.31
Nearest Invalidation Level: 155.00
Potential Target for Wave (v) of ((v)): 184.60
Educational Note:
Students of Elliott Wave Theory are encouraged to practice drawing their own wave counts and verifying whether all subdivisions align with higher-degree wave principles. This practice will enhance your study, making it more accurate and practical. Always remember, in real markets, multiple possibilities exist, and this analysis focuses on one potential scenario. There is a risk of being completely wrong.
I am not Sebi registered analyst.
My studies are for educational purpose only.
Please Consult your financial advisor before trading or investing.
I am not responsible for any kinds of your profits and your losses.
Most investors treat trading as a hobby because they have a full-time job doing something else.
However, If you treat trading like a business, it will pay you like a business.
If you treat like a hobby, hobbies don't pay, they cost you...!
Hope this post is helpful to community
Thanks
RK💕
Disclaimer and Risk Warning.
The analysis and discussion provided on in.tradingview.com is intended for educational purposes only and should not be relied upon for trading decisions. RK_Charts is not an investment adviser and the information provided here should not be taken as professional investment advice. Before buying or selling any investments, securities, or precious metals, it is recommended that you conduct your own due diligence. RK_Charts does not share in your profits and will not take responsibility for any losses you may incur. So Please Consult your financial advisor before trading or investing.
Charting with Elliott WavesUnderstanding how to do Technical Analysis of any chart based on Elliott Waves
This analysis is for educational purposes only and should not be considered as trading advice. Multiple scenarios are possible in the real market, and there is a risk of being wrong. It is essential to consult with a financial advisor before making any trading or investment decisions. We are not responsible for any profits or losses incurred based on this analysis.
Wave Rules:
Wave 2 cannot retrace more than 100% of Wave 1.
Wave 3 is never the shortest wave.
Wave 4 should not overlap with Wave 1's price territory, except in diagonal triangles.
Applying Elliott Wave Theory
Elliott Wave Theory is a powerful tool for traders, but it requires practice and a deep understanding of market psychology. By analyzing wave patterns, degrees, and Fibonacci relationships, traders can gain insights into potential market trends and make informed trading decisions. It is important to combine Elliott Wave analysis with other technical indicators and risk management strategies to enhance the accuracy and reliability of market forecasts.
Elliott Wave Theory provides a comprehensive framework for understanding market cycles and predicting price movements. By mastering its principles and applying them with discipline, traders can enhance their ability to navigate the financial markets and capitalize on emerging trends.
Let's understand study of this chart
Current Wave Structure
Primary Wave Count:
- The chart illustrates a completed five-wave impulse sequence (1-2-3-4-5) followed by a corrective phase.
- The primary impulse wave (labeled in red) has completed its cycle, marked by a significant peak at Wave 5.
- The subsequent corrective wave (labeled in blue as (4)) has also completed, indicating a potential beginning of a new impulse sequence.
Subwave Count:
- The internal structure of the primary waves shows clear subwaves, especially within the third wave, which is typically the strongest and longest.
- The chart depicts detailed labeling of smaller degree waves (i-ii-iii-iv-v), ensuring adherence to Elliott Wave principles.
Recent Breakout Analysis
Breakout Confirmation:
- Recently, the price has broken out from a consolidation zone, supported by increased trading volumes. This is a positive sign indicating strong market interest and momentum.
- The breakout occurred after the price retested the previous resistance level, which now acts as a support. This successful retest enhances the credibility of the breakout.
Future Projections
Impulsive Bias:
- Based on the wave structure, the stock appears to be in the early stages of a new impulse wave. This suggests a bullish outlook with potential for significant upward movement.
- The immediate target for this impulse wave is the 1.618 Fibonacci extension level at INR 2,976.60, aligning with typical Elliott Wave projections for Wave 3.
Invalidation Level:
- The nearest invalidation level for this bullish scenario is marked at INR 1,651.40. A break below this level would suggest a re-evaluation of the wave count and the current bullish bias.
Conclusion
The technical analysis of Dalmia Bharat Ltd. indicates a favorable outlook for continued upward movement, supported by a clear Elliott Wave structure and recent breakout confirmation with good volume. However, traders should monitor the invalidation level closely.
I am not Sebi registered analyst. My studies are for educational purpose only.
Please Consult your financial advisor before trading or investing.
I am not responsible for any kinds of your profits and your losses.
Most investors treat trading as a hobby because they have a full-time job doing something else.
However, If you treat trading like a business, it will pay you like a business.
If you treat like a hobby, hobbies don't pay, they cost you...!
Hope this post is helpful to community
Thanks
RK💕
Disclaimer and Risk Warning.
The analysis and discussion provided on in.tradingview.com is intended for educational purposes only and should not be relied upon for trading decisions. RK_Charts is not an investment adviser and the information provided here should not be taken as professional investment advice. Before buying or selling any investments, securities, or precious metals, it is recommended that you conduct your own due diligence. RK_Charts does not share in your profits and will not take responsibility for any losses you may incur. So Please Consult your financial advisor before trading or investing.
UNI wave reversal case studyCase study for UNI/USDT chart.
see how the MTF Wave down started at the correction. up to the entry there were no fakedowns. The first Fakedown have a clear long entry similar to the ideal MTF Wave illustrated on the right...
5-Year SPX500 Expectations - Greatest Opportunity Of Your LifeWould you believe me if I told you the US & global markets (some) will rally more than 65% to 125% (or more) over the next 4 to 5+ years?
You would probably call me crazy for even suggesting that will happen in a reasonably short time frame.
But, what if I could show you how structurally (using Elliot Wave concepts and Fibonacci) this incredible rally may already be baked into the markets?
What if I could show you that, barring any major economic destruction event, the US Fed and Global Central banks may have unleashed the inflation beast - which could lead to massive Hyperinflation over the next 5+ years?
Would you be prepared for it? Would you even believe me if I could show you evidence that it may happen much quicker than you can imagine?
And would you believe me if I told you Gold/Silver will rally more than 500% over the next 5+ years while attempting to hedge global debt/inflation risks?
Now is the time to prepare for the greatest opportunity of your life. You must understand the structural mechanics of price related to the current global market dynamics.
Please boost and share this video with your friends. Everyone needs to be aware of what is likely to happen over the next 5+ years so they can prepare for and profit from these exceptional price trends.
📍Part #1, Elliott Waves: "Introduction. Classification".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.
📍 Modes: 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
📍 Styles: 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.
📍 Patterns: 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
📍 Groups: 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.
📍 Styles: 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.
📍 Patterns: Flat, Triangle, Single Zigzag, Multiple Zigzag and Combination 📍
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
📍Divergences 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!
🔔 Click on the links below this lesson! 🔔
📍Part # 8, Combination - Corrective Waves.👩🏻💻 Hello !
This time we're going to look at combinations.
It may seem too complicated, but don't worry. In fact, any combination simply consists of two corrective patterns that you and I already know, only between these two patterns there is a connecting wave.
Let's go straight to the rules and everything will become clear to you at once!
✅ Rules ✅
📍A “double three” combination comprises two corrective patterns separated by one corrective pattern in the opposite direction, labeled 'X'. The first corrective pattern is labeled 'W', the second 'Y'.
📍A "double three" combination comprises (in order) a zigzag and a flat, a flat and a zigzag, a flat and a flat, a zigzag and a triangle or a flat and a triangle.
📍Wave 'X' appears as a zigzag or flat.
📍Wave 'X' always retraces at least 90 percent of wave 'W'.
📍Combinations have a sideways look. With respect to waves 'W' and 'Y' in a double three, only one of those waves in each type of combination appears as a single zigzag.
📍Combinations can occur in the same wave positions as flats and triangles (except for the triangle subwave) but cannot occur in waves 'W' and 'Y'.
✅ Guidelines ✅
📍Wave 'X' is often 123.6-138.2% the 'W' wavelength, less often wave 'X' retraces 161.8% or more. Don't expect wave 'X' to be more than 261.8% of wave 'W'.
📍Wave 'X' is usually a single or multiple zigzag.
📍When a zigzag or flat appears too small to be the entire wave with respect to the preceding wave (or, if it is to be wave '4', the preceding wave '2'), a combination is likely.
Thank you for your attention! There will be another lecture next week! Don't miss it!
🔔 Links to other lessons in related ideas. 🔔
The ultimate guide on Elliott waves in crypto tradingMost of you have probably heard about Elliott waves and we are sure that you don’t use it in cryptocurrency trading strategy because it’s very complicated and subjective approach. Crypto trading for beginners is very challenging and stressful even without Elliott waves. To be honest when we first time tried to implement it to my crypto trading strategies it was a complete disappointment. We were sure that it does not suit for both trading bot and manual trades. Elliott waves were thrown into a garbage bin for almost two years and we developed our crypto trading algorithm using only linear programming approaches.
While we have been trying to invent the best automated trading bot using only indicators and support and resistance levels, best crypto traders have been successfully using Elliott waves in their analysis. Finally we make a decision to have a deep dive in this popular crypto trading tool and studied in details all available literature. As a result we found that Elliott waves will ruin your trading if you use it without special indicators for confirmation. Now we have 2 years of experience in trading with waves and almost one year ago we implemented them into our algorithmic trading bot. Today we prepared the best ultimate guide ever on Elliott waves using best practices and our unique experience how to use them in developing your own profitable crypto trading strategies. Let’s go!
Why it’s vital to use Elliott waves?
Before answer this question, let me ask another one! Why is important to use map to reach the final destination? I think here is the obvious answer! Talking about Elliott waves it’s almost the same reason. This is the only one approach which gives you a map for a price chart. I think you agree that technical indicators or support and resistance levels will not give you the answer which direction the price will choose. When you have, for example Stochastic Oscillator crossover or RSI oversold area hit you just open long because this is the most common strategy. You buy asset like a blind kitten. We are not criticize this approach, because using proper risk and money management you will earn with almost every strategy, but understanding the Elliott waves concept will dramatically increase your profit even if you combine them with your ordinary strategy. Why it’s happening? The answer is easy, because Elliott waves in the underlying structure of the market. You will be aware when you shall use your signals and when it’s better to skip trade. Now let’s dive into the Elliott waves to understand how to find them on the price chart. In the first part we will give you all needed theory and after that we will show in the real charts how it works.
Elliott waves
In general, Elliott waves concept is pretty easy. All markets are globally moving up with the five waves formations and then show the pullback with at the reactive waves. On the Bitcoin price chart above you can see the most common picture for Elliott waves. We had the bull run which consists of five waves and then was the bear market represented with the ABC correction.
Waves can be divided into two groups: impulsive and reactive. On the bullish phase waves 1, 3 and 5 are impulsive, 2 and 4 reactive. Impulsive waves consists also with five sub waves, while reactive have usually three waves (exception the triangle correction, will be covered later). On the bearish phase we have the opposite situation: waves A and C are impulsive, while wave B is reactive. Now let’s discuss each wave in details.
What will stop every wave in 90% of cases?
Before we will observe the wave it’s very important to understand what are the early signs that current wave is about to be finished. This is really crucial concept because without it almost impossible to use Elliott waves for profitable trading. We need four tools to make sure that our counting is correct. In this article we will not spend to much time for these indicators, we just show you in practice how to use them. These tools are: Awesome Oscillator, Market Facilitation Index (MFI), Fibonacci retracement and extension and Fractals. These four indicators produce five wave’s end conditions.
Divergence with Awesome Oscillator. If you found five sub waves inside any wave and you can see that price set the higher high (or lower low for bearish case), while AO set lower high (or higher low) it’s divergence between wave 3 and 5. This is the most powerful signal that trend is over.
Fractal at the top or bottom. When you see the divergence it’s just the first sign of trend weakness, we need confirmation with the fractal forming at the top or bottom. You can easily find this indicator in TradingView, it will show you all fractals.
MFI squat bar. We will cover MFI in one of the next educational articles, now you just need to know that it has squat state - the last battle between bulls and bears. One of the three top bars will be the squat in 80% of waves end. You can also find this indicator in TradingView.
AO momentum change. Another one confirmation that trend is over is when AO histogram changes color. It’s better to wait three consecutive columns of the other color or when AO will cross back the signal line, 5 period MA of the AO.
Target area. Using Fibonacci extension and retracement we can find the area where the reversal is the most likely. We will show you this targets when talking about waves.
Now you know the five basic rules and we are ready to discuss every wave using this concept.
Wave 1
When the previous trend is over the impulsive wave 1 begins. We can define the wave 1 start only establishing the previous wave end. It could be wave 5, C or E. It does not matter. You just need to apply our five rules: divergence, momentum change, target area, squat bar and fractal. On the chart you can see how in theory wave 1 can be looks like.
Wave 1 always consists of five waves. That’s why we can wait for the same five rules to complete between wave 3 and 5 inside the wave 1. When you anticipate the wave 1 finish you have two options: close trade and re-enter at the wave 2 bottom or hold for the entire cycle.
Wave 2
When wave 1 ends, you will see pull back in wave 2. It’s important to catch wave 2 bottom because wave 3 will bring you a lot of profit. Wave 2 can be classical ABC zigzag, flat or irregular correction. 70% probability it will be ended inside 0.38 and 0.62 Fibonacci retracement range of wave 1, in rare cases it can ends higher or lower. That’s why it’s better t count waves inside wave 2 and do not miss when all five trend killing conditions are met in wave C inside 2.
Wave 3
The most impulsive wave in the entire cycle is obligatory for trading. Here you can have the less risky and the most easy trading. Wave 3 has the great fundamental factors as a price drivers. For example, Bitcoin spot ETF triggered a huge pump recently. Let’s imagine you correctly entered at the wave 2 end. Now we have to define wave 3 targets. The target area using fibonacci extension can be found between 1 and 1.61. This is the most likely case. In crypto it’s very often when waves 3 are extended.
To have the most precise target it’s highly recommended to count waves inside wave 3. Found five waves? Check our favorite trend killing rules to exit a trade at the top. We know it sounds fantastic, but we managed to buy the exact bottom and sell at the top many times, but to be honest, we have never caught the top of the extended wave 3. Need more experience for that.
Wave 4
Wave 4 can be the most complicated because it has a lot of different variants: zigzag, flat, irregular or even triangle. But at the same time in wave 4 we can have the easiest setup. When you predicted wave 3 top, it’s time to setup the target for the wave 4. The most reliable one is between 0.38 and 0.5. This wave is not so rapid as wave 2 and takes much more time (up to 70% of all cycle).
The very important tip here is to look at the price where wave 4 inside wave 3 has been ended. If this level coincides with the 0.38-0.5 zone it can give you much more confidence. We have never made a mistake using this technique. As usual you have to look for the five trend killing rules in wave C inside wave 4 as well.
Another one thing we want to point out. You know the axiom, that wave 4 has not overlap wave 1 top. This rule can be slightly violated and we will show you the case. Don’t pay attention that much to this rule.
Wave 5
Finally we are in wave 5. This is really vital to define it’s top because bear market will follow this wave and can destroy your deposits. The target area for the wave 5 is defined as the distance between wave 1 bottom and wave 3 top, measured from wave 4 bottom. Area between 0.61 of this distance and 1 Fibonacci level is our target. There you have to find trend killing rules as usual but this time for all cycle, not subwaves.
Corrections
The most dangerous place for trading is the correction. From our experience only wave C in zigzag is tradable. You would better to skip corrections and try to catch it’s end. We have four types of corrections, but the most important knowledges is that wave C and E are always consists of five waves. It means you can use the rules how to catch wave 5 end inside these waves.
Zigzag ABC. If wave A consists of 5 waves the most like we will see zigzag. Wait when wave B reach 0.5-0.61 Fibonacci of wave A and be ready to trade in wave C.
Flat. Wave A has 5 waves inside. Waves A, B and C are almost equal to each other.
Irregular. Wave B top is higher that the previous impulsive wave. Wave A consists of 3 waves.
Triangle. Consists of A, B, C, D and E waves. Wave E consists of five waves. Usually occurs inside waves 4 and B of higher degree.
Now you have a theoretical description. It’s time to trade!
📍Part #7, Multiple Zigzag - Corrective Waves - Combined.👩🏻💻Hello!
Dear colleagues, this is the 7th lesson on wave analysis and today we are going to look at Multiple Zigzag. We already know what a Zigzag is, so we will not look at this pattern for a long time, but just to clarify that Multiple Zigzag consists of several Zigzags.
Let's get to the rules and guidelines!
✅ Rules ✅
📍A Multiple Zigzag comprise two (or three) single zigzags separated by one (or two) corrective pattern(s) in the opposite direction, labeled "X". In the first case, it is called «double zigzag», in the second - «triple zigzag» (The first single zigzag is labeled "W", the second "Y", and the third, if there is one, "Z".)
📍Waves "W", "Y" and "Z" are always single zigzags.
📍Wave "X" never goes beyond the beginning of waves "W" and "Y".
📍Wave "Y" always ends past the end of the "W", and wave "Z", if any, always ends past the end of the "Y".
📍The first "X" wave always ends on the territory of the "W" wave, the second "X", if any, on the territory of the "Y" wave.
📍In a triple zigzag, the first "X" wave is always a zigzag, flat or combination. The second "X" wave is always a zigzag, flat, triangle or combination.
📍In a double zigzag, wave "X" is always a zigzag, flat, triangle, or combination.
📍Double and triple zigzags replace single zigzags, but cannot appear as "W", "Y", or "Z" waves.
✅ Guidelines ✅
📍In a double zigzag, wave "Y" can equal wave "W", .618 wave "W", 1.618 wave "W", or terminate at a distance equal to 1.618 wave "W" past wave "W". In a triple zigzag, there can be equality among waves "W", "Y" and "Z", or wave "Z" can equal 1.618 wave "Y", 1.618 wave "Y", or terminate at a distance equal to 1.618 wave "Y", past wave "Y". In a triple zigzag, the Fibonacci relationships between waves "W" and "Y", would be the same as a double zigzag.
📍The Fibonacci relationships between waves "W" and "X" in a double zigzag, and waves "Y" and "XX" in a triple zigzag are analogous to the relationships between waves "A" and "B" in a single zigzag.
📍In a double zigzag, as a guideline, wave "b" of wave "Y" should not break the trendline that connects the beginning of wave "W" with the end of wave "X".
📍As a guideline, wave "X" (second wave "X" of the triple zigzag) of a double zigzag should break the trend channel formed by the first zigzag in wave "W" ("Y") and be greater than 80% of subwave "b" of wave "W" ("Y" and "Z").
📍When a zigzag appears too small to be the entire wave with respect to the preceding wave (or, if it is to be wave "4", the preceding wave "2"), the complication of the structure to a multiple zigzag will probably follow.
Thank you for your attention! There will be another lecture next week! Don't miss it!
🔔 Links to other lessons in related ideas. 🔔
📍Part #6, FLAT - Corrective Waves-Simple-Sideways corrections.👩🏻💻Hello!
In this lecture, we will cover one of the options for corrective cycles, namely Flat.
Let's now look at the 'flat' separately as a stand-alone correctional structure. I remind you, 'flat' and 'plane' are essentially the same thing. So, the 'flat' always has a three-wave structure, and it looks like this: 3-3-5. That is, you can identify it by the third wave "C", which always has a five-wave structure. But it can also be a Ending diagonal. And all this will be within the scope of a regular 'flat' or 'plane'. If we draw a line from the base of wave A and the maximum of wave "B", and then also draw a line or level from the end of wave "A" and the end of wave "C", we will get parallel lines, which is exactly what the name Flat hints. And this wave "B" should roll back approximately 90% of wave "A" for everything to look nice. But not always, because there is also an expanded 'flat' and a running 'flat', whichever you prefer.
Well then. Let's look at the main rules and guiding norms for flats.
✅General rules✅
📍A flat always subdivides into three waves.
📍Wave "A" is always a zigzag, flat or combination.
📍Wave "B" is always a zigzag.
📍Wave "C" is always an impulse or a ending diagonal.
✅General guidelines✅
📍Wave "A" is usually a zigzag.
✅Regular Flat✅
Rules
📍Wave "B" never goes beyond beyond the start of wave "A".
📍Wave "B" always retraces at least 90 percent of wave "A".
📍Wave "C" always ends past the end of wave "A".
Guidelines
📍The rarest type of flat correction.
✅Expanded Flat✅
Rules
📍Wave "B" always ends after the start of wave "A".
📍Wave "C" always ends past the end of wave "A".
Guidelines
📍Wave "B" usually retraces 123.6 or 138.2% of wave "A", less often — 161.8%.
📍Wave "C" is often equal to 161.8% of wave "A", less often — 261.8%.
📍The most common type of flat correction.
✅Running Flat✅
Rules
📍Wave "B" always ends after the start of wave "A".
📍Wave "C" never goes beyond the end of wave "A".
Guidelines
📍Within such a flat wave "B" should end well above the origin of wave "A" and that means wave "C" might reflect a 61.8% or even a 100% relationship to wave "A".
📍A running flat indicates that the forces in the direction of the larger trend at next higher degree are powerful.
📍Wave "B" is usually no more than twice the length of wave "A".
Keep in mind that a running flat is rare.
Thank you for your attention! There will be another lecture next week! Don't miss it!
🔔Links to other lessons in related ideas.🔔
📍Part 5: Corrective Waves - Simple - Triangle.Hello!
➡️In this lecture, we will cover one of the most common or popular correction options - triangles. I remind you that we are now considering various correction structures that are encountered both separately and can be part of more complex structures.
➡️Triangles are probably the most popular pattern for all beginners, yes, and not only beginners. It is quite often seen on the chart and most likely everyone tried to trade it according to classical recommendations, for example from books or a course, when essentially everything comes down to breaking dynamic resistance on one of the sides where you buy or sell.
➡️In history, everything looks pretty harmonious as usual, but in real-time, it turns out to be not that simple, and here maybe just the rules from wave analysis will help to avoid a certain number of errors.
➡️So let's take a look at the main rules and guiding norms for triangles!
✅ General Rules ✅
📍A triangle always subdivides into five waves.
📍At least four waves among waves "a", "b", "c", "d" and "e" are subdivided into a single zigzag.
📍In a triangle, only one subwave can be a multiple zigzag or triangle.
✅ General guidelines ✅
📍Usually, wave "c" or wave "d" subdivides into a "multiple zigzag" that is longer lasting and contains deeper percentage retracements than each of the other subwaves.
📍Alternating waves of a triangle may be in Fibonacci proportion to each other by a ratio of 0.618 for contracting triangles and 1.618 for expanding triangles. For example, in a contracting triangle, look for wave "c" to equal 0.618 of wave "a".
📍A triangle can be correction wave "4" in the impuls, wave "b" of a zigzag, wave "x" of a double or second wave of an "x" of a triple zigzag, sub-wave "c", "d" or "e" of a triangle and the last structure of a combination.
✅ Contracting Triangle ✅
Rules
📍Wave "c" never moves beyond the end of wave "a", wave "d" never moves beyond the end of wave "b", and wave "e" never moves beyond the end of wave "c". The result is that going forward in time, a line connecting the ends of waves "b" and "d" converges with a line connecting the ends of waves "a" and "c".
📍Waves "a" and "b" never subdivide into a triangle.
📍In a running contracting triangle, wave "b" should be no more than twice as long as wave "a".
Guidelines
📍Sometimes one of the waves, usually wave "c", "d" or "e", subdivides into a contracting or barrier triangle. Often the effect is as if the entire triangle consisted of nine zigzags.
📍About 60% of the time, wave "b" goes beyond the beyond the start of wave "a". When this happens, the triangle is called a running contracting triangle.
✅ Barrier Triangle ✅
Rules
📍Wave "c" never moves beyond the end of wave "a", wave "d" never moves beyond the end of wave "b", and wave "e" never moves beyond the end of wave "c". The result is that going forward in time, a line connecting the ends of waves "b" and "d" converges with a line connecting the ends of waves "a" and "c".
📍Waves "b" and "d" end at essentially the same level.
📍In a running barrier triangle, wave "b" should be no more than twice as long as wave "a".
Guidelines
📍About 60% of the time, wave "b" goes beyond the start of wave "a". When this happens, the triangle is called a running barrier triangle.
📍When wave "5" follows a barrier triangle, it is typically either a brief, rapid movement or an exceptionally long extension.
✅ Expanding Triangle ✅
Rules
📍Wave "c", "d" and "e" each moves beyond the end of the preceding same-directional subwave. (The result is that going forward in time, a line connecting the ends of waves "b" and "d" diverges from a line connecting the ends of waves "a" and "c.")
📍Subwaves "b", "c" and "d" each retrace at least 100 percent but no more than 150 percent of the preceding subwave.
Guidelines
📍Subwaves "b", "c" and "d" usually retrace 105 to 125 percent of the preceding subwave.
📍 Part 4. Corrective Waves- Simple Zigzags - Sharp Corrections.👩🏻💻 Welcome to the 4th lecture on Elliott Waves!
➡️In this lecture, we will start discussing the variations for corrective movements. Let's begin with the simplest one - it's zigzags.
➡️By correction, we mean the construction "ABC" after an impulse. This reminds us of a zigzag, hence the name. Also, we can encounter it in each corrective wave, that is, "2" and "4" - it's the simplest and most common form of correction.
➡️As you recall from previous lectures, for waves "A" and "C," there are variations in the form of Leading and Ending Diagonals, and the same applies to "B," namely flat, zigzag, triangle, or even a combination, i.e., any three-wave pattern. Here it's worth remembering that wave structure is fractal, and there's no need to be afraid, just like with variations for impulses, namely leading and ending diagonals.
➡️Zigzags can often be embedded into a parallel channel. We've dealt with a simple zigzag. Most likely, your main questions are about variations for "B": flat, zigzag, triangle, or combination. On the cover of the learning materials, you will find the main variations of simple zigzags. Keep and use them!
📍 Let's look at the main rules and guidelines! 📍
📍 Guidelines: 📍
📍In a zigzag, wavelength "C" can be equal to wavelength "A".
📍Wave "B" is usually corrected at 38.2% - 78.6% of the length of wave "A".
📍If wave "B" is a triangle, is usually corrected at 38,2% - 50% of the length of wave "A".
📍If wave "B" is a zigzag, is usually corrected at 50% - 78.6% percent of wave "A".
📍In a zigzag, if wave "A" is a leading diagonal, then we would not expect to see an ending diagonal for wave "C".
📍A line connecting the ends of waves "A" and "C" is often parallel to a line connecting the end of wave "B" and the start of wave "A". (Forecasting guideline: Wave "C" often ends upon reaching a line drawn from the end of wave "A" that is parallel to a line connecting the start of wave "A" and the end of wave "B".)
📍Waves "A" and "C" within the zigzag often appear in the form of impulses, but more often alternate according to the type of motive waves: if wave "A" is an impulse, expect wave "C" in the form of a diagonal, and vice versa. It is much less common to find waves "A" and "C" in the form of diagonals.
Thank you for your attention! There will be another lecture next week! Don't miss it!
🔔 Links to other lessons in related ideas. 🔔
Education chart - SIMPLE ZIGZAGS in WXY DOUBLE ZIGZAGI started to assemble own ibrary of ElliottWave patterns and rules.
Here simple zigzags occured in: wave W and wave Y of WXY double zigzag
Zigzag 1 - wave W
Wave A - leading diagonal
Wave B - double zigzag
Wave C - ending expanding diagonal ending at the top line of the parrallel channel
Zigzag 2 - wave Y
Wave A - impulse
Wave B - double zigzag
Wave C - ending expanding diagonal ending at the middle of the parrallel channel
-----------------------------------------
## Rules for Simple ZigZag
- Subdivide into three waves.
- Wave A is always an impulse or leading diagonal (expanding or contracting)
- Wave C is always an impulse or ending diagonal (expanding or contracting).
- Wave B is any corrective pattern.
- Wave B never moves beyond Wave A start
- Wave B always ends in Wave A territory
- Wave A and C cannot be both diagonals of the same type (contracting/contracting or expanding/expanding), other combinations are possible
## Norms
- Waves A and C are frequently impulse waves but even more often they alternate between impulse and diagonal modes. Waves A and C may occasionally alternate between contracting and expanding diagonals
- Waves A and C cannot be diagonals of the same type
- Wave C must travel past Wave A's top. In Elliott Wave Theory, failure to do so is referred to as truncation
- Wave C should not go below 90% of Wave A
## Guidelines
- Wave C is typically equal to 0.618 (occasionally 1.618 or 2.618) of wave A
- Wave B typically retraces 38-79% of Wave A
- in case B is a triangle it retraces **38-50%** of Wave A
- in case B is a running triangle, the retracement can be **10-40%**
- in case B is zigzag, the expected retracement is **50-79%**
- The parallel channel that connects Wave A's start and Wave B's finish may provide a hint of where Wave C might conclude by extrapolating the other line from Wave A's end
- If waves A and C are both strong, wave C will reverse at the channel's top line
- If wave C appears weaker than wave A, it may reverse at the channel's middle
- If Wave C performs stronger than A, a double channel will be used as a target of the reversal point.
## Occurs in
Wave 2
Wave 4 (unless happened in wave 2)
Wave W, Y of WXY double zigzag
Wave W or Y of a combination
Wave B of ABC flat
Waves 1, 2, 3, 4, 5 in contracting diagonal
Wave B of ABC zigzag
Wave X of WXY double zigzag
📍Part 3. Motive Waves - Leading & Ending Diagonals.👩🏻💻Welcome to the 3nd lecture on Elliott Waves!
➡️In this lecture, I will talk about the Leading and Ending diagonals as the primary and most common variations of impulsive waves. We will also touch on the Expanding diagonal, which occurs significantly less frequently. Earlier, we covered the general concept of impulse and its structure. Now, I will specifically discuss the variations of impulses and, namely, for waves "1", "5", as well as corrective waves "A" and "C".
➡️Let's start with variations for the first wave in the impulse and correction. This is the Leading diagonal. This structure may remind you of an ascending triangle, and essentially, that's what it is. The first wave itself implies that before this, we were moving in the opposite direction. So, if wave 1 is ascending, it means there was a certain descending movement before it. And it's obvious that in this descending movement, sales prevailed. Thus, reversing the price in the opposite direction may not be so easy. In such cases, when it's not easy, we get not a sharp 5-wave impulse but a Leading diagonal, where conditional buyers, as it were, chew their way upwards.
➡️Next, of course, there is correction and further growth. The Leading diagonal can also be encountered in wave a of correction "ABC". And here, the logic remains the same since the correction goes in the opposite direction of the trend; we have significant support for demand. In our example, this is an ascending trend. Therefore, we don't get a sharp impulse, but gradually, and squeezing, which forms the structure of the Leading diagonal.
➡️As you already understand, waves "2" or "4" also have a correctional structure "ABC", where "A" can also be a Leading diagonal. And then, you can encounter the Leading diagonal in wave "1" and in wave "A", and since they reverse the direction of movement, the structure is not formed like a sharp impulse but more like an ascending triangle in the case of wave "1" and a descending triangle in the case of corrective wave "A".
➡️Moving on to the Ending diagonals. You can get them in wave "5" and wave c in the corrective structure "ABC". Here the principle is similar, as you might have guessed, to the case of wave "5". We see how the ascending movement fades, as if the buyers no longer have the strength to move the price, impulsively upwards, I remind you, we are considering an example of an ascending trend movement.
➡️You can encounter the Ending diagonal in wave "5" and wave "C". It turns out everything is quite logical and simple. Wave "1" starts the impulse, and wave "A" starts the correction. Wave "1" starts the impulse, and wave "A" starts the correction. In turn, wave "5" completes the impulse, and wave "C" completes the correction.
➡️Well, now we need to understand the rules for the Leading and Ending diagonals to determine them correctly.
➡️Now let's look at the rules separately for Contracting diagonals!
📍 Rules 📍
📍In the contracting variety, wave "3" is always shorter than wave "1", wave "4" is always shorter than wave "2", and wave "5" is always shorter than wave "3" (1 > 3 > 5 and 2 > 4).
📍Going forward in time, a line connecting the ends of waves 2 and 4 converges towards with the line connecting the ends of waves "1" and "3".
📍 Guidelines 📍
📍In the contracting variety, wave "5" ends beyond the end of wave "3" (only for the Leading diagonals).
📍In the contracting variety, wave "5" ends beyond the end of wave "3" or does not reach the end of wave "3": truncation (only for the Ending diagonals).
📍In the contracting variety, wave "5" usually ends at or slightly beyond a line that connects the ends of waves "1" and "3" (Ending beyond that line is called a throw-over).
📣This concludes the lecture on impulse waves. Save the images and practice.
Next week I'll talking about the Corrective Waves - Simple - Sharp Corrections.
🔔 Links to other lessons in related ideas. 🔔
📍Part #2, Elliott Waves: "Motive Waves - Impulse".👩🏻💻 Welcome to the 2nd lecture on Elliott Waves.
So, Elliott Wave Theory suggests that price behavior follows a wave structure, with three waves being impulse waves and 2 being corrective waves. It can be said that these 5 waves look like the image above.
➡️For example, let's take an upward impulse, where the impulse refers to all these five waves. We observe the first wave of growth, then the second wave is corrective to the first, meaning the second wave is specifically a correction for the first wave. Next, the third wave is a growth wave, the fourth is corrective for the third, and the fifth wave concludes the impulse. Following the completion of the impulse or the five-wave sequence, a correction occurs in the form of A, B, C.
➡️This entire structure is fractal, meaning that if our upward impulse has three waves, and they are also impulse waves, such as the first, third, and fifth, and as impulse waves, as we already know, consist of five waves, then each impulse within this larger five-wave sequence has the same structure of five waves. Furthermore, in the correction A, B, C, waves A and C also have a five-wave structure, but more on that in the next lessons.
➡️If you ask about the timeframes to work with waves, I would say that the 1-hour timeframe is the threshold below which it is not recommended to consider the structure!
Next, I will describe the basic rules and regulations concerning impulses in the form of pictures, which are convenient to save and use as a hint when analyzing charts.
➡️Now let's consider some rules that are mandatory for all impulse movements.
Rules
An impulse always subdivides into five waves.
Strong guidelines
📍Wave A almost always will alternate with wave B. Alternation can be expressed in two ways:
1) In the type of correction: sharp/sideways or vice versa
2) In the presence of extension: in waves 2 and 4 of the impulse, two sideways patterns are possible, but only one of them will have an extreme beyond the peak of the previous wave.
📍Wave 4, as a rule, significantly violates the channel formed by the subwaves of wave 3.
📍As a strong norm, no part of wave 4 should enter the price territory of wave 1 or 2.
📍As a strong norm, the peak of wave 4 should not extend beyond the doubled channel constructed from the peaks of waves 1, 2, and 3, while the midline of the channel will serve as the minimum achievable target.
📍Second waves of impulses tend to go beyond the previous fourth wave. When using this norm, the previous fourth wave serves as the minimum target.
📍Sometimes wave 5 does not move beyond the end of wave 3 (in which case it is called a truncation).
📍Often, waves 1 and 5 of the impulse form impulses, but more often they alternate in the type of motive waves: if wave 1 is an impulse, expect wave 5 in the form of a diagonal, and vice versa. Less commonly, waves 1 and 5 form diagonals, but in this case, alternation will be expressed in the form of a pattern: contracting/expanding.
So there are also many other lesser indications, but they are too numerous and less frequent.
Therefore, I recommend that we focus on the main ones for the time being.
📣This concludes the lecture on impulse waves. Save the images and practice.
Next week I'll start talking about the Leading and Ending diagonals.
🔔 Links to other lessons in related ideas. 🔔
