Elliott Wave Principles
Theory named after Ralph Elliott, who studied and identified recurring patterns in the financial markets and in nature. He believed that all human actions are influenced by those recognized Wave series. He has published several articles in 1939 in the Journal of Financial World. After his death, other analysts, such as Hamilton Bolton (1960g.) and Robert Prechter (1978) Elliott and elaborated on the study published in various books and newsletters.
The main force in the market is constantly fighting among themselves in a "tug". Every movement or impulse accompanied by corrective setback. This forms the basic concepts of Elliott wave theory:
1. Action is accompanied by reaction. That is, the trend is accompanied by a recovery.
2. The main trend will contain the five waves, followed by three corrective waves.
3. These 5 - and 3-wave cycles are the two pillars of the next wave of higher order.
For better illustration, trends or shocks will be marked with the letter "T", and corrective restoration letter "R". These 5 waves in the wave of the main trend would be represented as TRTRT. Thus, the main trend consists of 3 T-waves and R-2 waves. These 5 waves are marked with numbers 1, 2, 3, 4 and 5.
3 waves during a correction or rehabilitation would have been a model TRT and marked on the graph lowercase letters a, b and c. Correction is always movement in the opposite direction of motion 1-5.
Elliott wave theory says that each wave within the wave a 5-3 wave count of smaller cycles. Thus, large T-wave will be entered into 5 smaller waves in a model TRTRT. And to a large R wave, which is a correction for a large T wave would be concluded 3 smaller waves in a model of TRT.
Basic principles of Elliott Wave:
1). Waves trend divided into 5 waves.
2). Waves restoration is divided into 3 waves.
3). Wave 2 never recovers more than 100% of wave 1.
4). Wave 4 never recovers more than 100% of wave 3.
5). Wave 3 is always higher than the price level of wave 1.
6). Wave 3 is often the longest and never the shortest of Waves 1, 3, and 5.
7). If wave 5 does not exceed the price level of wave 3, it is referred to as bovine or Bear market, warned that the main weakness or strength in the market. Wave 5 has been reduced or cut off because the main weakness or strength.
8). The wave of the trend can be diagonal to form a triangular pattern, still including the 5 smaller waves.
9). Wave of Recovery can form a horizontal triangular pattern, and include 5 or more smaller waves.
10). If wave 2 is sharp recovery, the wave 4 will most likely be accomplished by a lateral adjustment and vice versa.
11). The lines, carried out in order to form a parallel trend channel, often indicate the upper and lower boundaries of the waves. Conducting trend lines through the points 1 and 3, it is possible to predict the end of wave 5, when the wave 1 and 3 are normal.
12). Wave principles does not provide certainty about any market impact. But they can be a tool for assessing the possible future market action.
Quite often, corrective wave restores Fibonacci percentage from the previous wave. Strong correction often restore the 61.8% or 50%. Lateral correction often recover 38.2%, especially in wave 4. Most analysts focus on the waves of the reconstruction and measured the height of waves to predict the price objective, using the Fibonacci ratio. Recommendation: Use the Fibonacci principles to predict the price and use the principles of Elliott, to determine when a wave of ripe or over. Look for the correlation of these two principles.
There are situations where the analysis of the market somewhat complicated and its interpretation is unclear. The Council is to keep confusing the model at rest until the next wave did not clarify the picture. The best approach is to apply deductive reasoning. Learn Elliott Wave principles, rules and models, and use this knowledge to determine what would be the likely course of movement of the market. The primary purpose of the analysis lies in determining whether skomplektovana whether the model is over whether the wave. If the market changes direction, as expected, then you caught a turn. If the market itself is bad, "your conclusion wrong, your money is in danger and should leave immediately. Recommendation: be patient and understand at first, where the market is in the unfolding model, and then deal with the trend.
Applying Elliott Wave
Recommendations divided Mary Ivy:
What is the Elliott Wave? Elliott Wave - is a graphical model, nothing more and nothing less. It is entitled, like any model. These rules also relate to the Fibonacci proportions.
The rules are: the markets are moving in the impulsive and corrective manner. Impulsive motion has 5 waves: 1, 2, 3, 4, 5. These 5 waves in motion impulsively must not overlap. Nonoverlapping wave should be marked with numbers as shown below. Characteristics of impulse movement - non-overlapping waves, as in the figure, where the ground wave 4 and wave 1 peak does not overlap. Corrective waves overlap. Normally corrective Movement has 3 waves, which are marked a, b, c.
Wave 3 can not be the smallest. Or wave 3 or wave 5 will be the longest. Waves 1, 3, 5, a and c are the pulse. Waves 2, 4, and b are the correction.
Why study the Elliott Wave? It helps to stay the course of market movement, as close as far as possible.
Torgu I use Elliott Wave? Yes, every day. I will combine with other Elliott wave patterns to find the entry point with less risk than if I traded only with the waves. Transactions in which I play - those where the Elliott wave clearly emerged from the waves of 2 to 3, from 3 to 4 waves and waves of 4 to 5.
What do I do when I see the market movement? I use a tool formations in order to know whether the market in the abc corrective model or 1-5 pulse model. My tool formations is such that c = 100% and 3 = 162%. If the market moves past the line of 100%, then I know that he is in the momentum flux. This is done as quickly and clearly as soon as there is movement.
Up to 100%, I do not know whether a pulse or a correctional model. I do not know how I will mark the waves - 1 or a, or 2 b, 3, or c, because they can become any.
In the usual model Gartli, wave 3 is not a 3 - this wave C. Wave 3 is not the right size - it reaches only 78% of recovery (for details, see the "butterfly effect" in the number 24).
Models Gartli mainly occur in the correctional market. 5-Elliott wave patterns occur most frequently on the impulse market. The following demonstrates how the market had been raised, ranging from a minimum of 2003. Model Gartli should be a model for Gartli because the market, although improving, is in a bear trend.
How do I sell? Here are two of the day, which are excellent examples of combinations of models and Elliott wave patterns butterfly Gartli. The market has formed a triangle, which was broken at the bottom of the beautiful in the 5-wave structure. All the proportions of the Fibonacci met.
Mismatch model, a developing right, goes up. This mismatch creates a wedge model, which is easier to notice in the next image.
Yellow arrows designated entry points.
Do Fibonacci ratio for this? Yes. They must not only know but to be able to quickly design goals, once you feel that you are in the unfolding model.
Are some waves? Not quite. Often, Elliott's model does not give exact entry points, and it is necessary to move to a smaller format in the interim to find a more accurate log with a small risk. This is very good if there are other models, which confirm the 5-wave structure or a model of recovery. This may be GEPy, wedges, canals, etc.
The model presented below, has a lower maximum (LH) with divergence in the MACD. "HH" notes a higher maximum. "LL" - a lower minimum.
I knew that I was in wave 3? No, at that time did not. But I had a triangle, to confirm the trade, and during its implementation, I realized that this is a 3 wave.
Here's how the triangle in the afternoon level (red circle). Yellow dotted lines have not yet been, but the level of "C" (yellow horizontal line). As I see it: if the market will not be able to form wave 3, it will fail. What will indicate to fail? If AB = CD. Because the "C" did not reach 162%. And if the market fails, it will make 5 waves down.
I held the lower border of the possible models of "head and shoulders." When the market did its five waves down, I expect that it would violate the neck in the 5th wave and provide an excellent opportunity for a short position. But this did not happen. The model did not work, and what happened when the script failed? The market went up like a bubble of air in the water. This is what happens when the failure of models - the market changes direction.
I knew that this day will trend upwards (red circle)? No, but a "head-shoulders" has failed and an excellent model of 1-2-3 was formed, at least 78% recovery Gartli.
Formation observed range was excellent "1-2-3" to the lower ground - or double basis with a good divergence in MACD, bear this out.
All this is happening fast enough. You can not use it, if not in perfect proportion and you know the rules, at least, the models shown in this article. The study of Elliott Wave is gradual. First you learn the rules of proportion and then begin to recognize the form of waves, and these forms show you the calculation and the calculation tells you about the same proportions.
Why not use the Elliott Wave? In this case, the size of the stop-orders would be too broad. Why not use the system log, on the basis of oscillators? Because I love the goal, I moved with Fibonacci ratios. I also love the Elliott Wave. I really like the shape. I like to assume when they become available. I like to take the wave. I love alternatives that Elliott wave theory suggests, on the market movement.
Theory named after Ralph Elliott, who studied and identified recurring patterns in the financial markets and in nature. He believed that all human actions are influenced by those recognized Wave series. He has published several articles in 1939 in the Journal of Financial World. After his death, other analysts, such as Hamilton Bolton (1960g.) and Robert Prechter (1978) Elliott and elaborated on the study published in various books and newsletters.
The main force in the market is constantly fighting among themselves in a "tug". Every movement or impulse accompanied by corrective setback. This forms the basic concepts of Elliott wave theory:
1. Action is accompanied by reaction. That is, the trend is accompanied by a recovery.
2. The main trend will contain the five waves, followed by three corrective waves.
3. These 5 - and 3-wave cycles are the two pillars of the next wave of higher order.
For better illustration, trends or shocks will be marked with the letter "T", and corrective restoration letter "R". These 5 waves in the wave of the main trend would be represented as TRTRT. Thus, the main trend consists of 3 T-waves and R-2 waves. These 5 waves are marked with numbers 1, 2, 3, 4 and 5.
3 waves during a correction or rehabilitation would have been a model TRT and marked on the graph lowercase letters a, b and c. Correction is always movement in the opposite direction of motion 1-5.
Elliott wave theory says that each wave within the wave a 5-3 wave count of smaller cycles. Thus, large T-wave will be entered into 5 smaller waves in a model TRTRT. And to a large R wave, which is a correction for a large T wave would be concluded 3 smaller waves in a model of TRT.
Basic principles of Elliott Wave:1). Waves trend divided into 5 waves.
2). Waves restoration is divided into 3 waves.
3). Wave 2 never recovers more than 100% of wave 1.
4). Wave 4 never recovers more than 100% of wave 3.
5). Wave 3 is always higher than the price level of wave 1.
6). Wave 3 is often the longest and never the shortest of Waves 1, 3, and 5.
7). If wave 5 does not exceed the price level of wave 3, it is referred to as bovine or Bear market, warned that the main weakness or strength in the market. Wave 5 has been reduced or cut off because the main weakness or strength.
8). The wave of the trend can be diagonal to form a triangular pattern, still including the 5 smaller waves.
9). Wave of Recovery can form a horizontal triangular pattern, and include 5 or more smaller waves.
10). If wave 2 is sharp recovery, the wave 4 will most likely be accomplished by a lateral adjustment and vice versa.
11). The lines, carried out in order to form a parallel trend channel, often indicate the upper and lower boundaries of the waves. Conducting trend lines through the points 1 and 3, it is possible to predict the end of wave 5, when the wave 1 and 3 are normal.
12). Wave principles does not provide certainty about any market impact. But they can be a tool for assessing the possible future market action.
Quite often, corrective wave restores Fibonacci percentage from the previous wave. Strong correction often restore the 61.8% or 50%. Lateral correction often recover 38.2%, especially in wave 4. Most analysts focus on the waves of the reconstruction and measured the height of waves to predict the price objective, using the Fibonacci ratio. Recommendation: Use the Fibonacci principles to predict the price and use the principles of Elliott, to determine when a wave of ripe or over. Look for the correlation of these two principles.
There are situations where the analysis of the market somewhat complicated and its interpretation is unclear. The Council is to keep confusing the model at rest until the next wave did not clarify the picture. The best approach is to apply deductive reasoning. Learn Elliott Wave principles, rules and models, and use this knowledge to determine what would be the likely course of movement of the market. The primary purpose of the analysis lies in determining whether skomplektovana whether the model is over whether the wave. If the market changes direction, as expected, then you caught a turn. If the market itself is bad, "your conclusion wrong, your money is in danger and should leave immediately. Recommendation: be patient and understand at first, where the market is in the unfolding model, and then deal with the trend.
Applying Elliott Wave
Recommendations divided Mary Ivy:
What is the Elliott Wave? Elliott Wave - is a graphical model, nothing more and nothing less. It is entitled, like any model. These rules also relate to the Fibonacci proportions.
The rules are: the markets are moving in the impulsive and corrective manner. Impulsive motion has 5 waves: 1, 2, 3, 4, 5. These 5 waves in motion impulsively must not overlap. Nonoverlapping wave should be marked with numbers as shown below. Characteristics of impulse movement - non-overlapping waves, as in the figure, where the ground wave 4 and wave 1 peak does not overlap. Corrective waves overlap. Normally corrective Movement has 3 waves, which are marked a, b, c.
Wave 3 can not be the smallest. Or wave 3 or wave 5 will be the longest. Waves 1, 3, 5, a and c are the pulse. Waves 2, 4, and b are the correction.Why study the Elliott Wave? It helps to stay the course of market movement, as close as far as possible.
Torgu I use Elliott Wave? Yes, every day. I will combine with other Elliott wave patterns to find the entry point with less risk than if I traded only with the waves. Transactions in which I play - those where the Elliott wave clearly emerged from the waves of 2 to 3, from 3 to 4 waves and waves of 4 to 5.
What do I do when I see the market movement? I use a tool formations in order to know whether the market in the abc corrective model or 1-5 pulse model. My tool formations is such that c = 100% and 3 = 162%. If the market moves past the line of 100%, then I know that he is in the momentum flux. This is done as quickly and clearly as soon as there is movement.
Up to 100%, I do not know whether a pulse or a correctional model. I do not know how I will mark the waves - 1 or a, or 2 b, 3, or c, because they can become any.In the usual model Gartli, wave 3 is not a 3 - this wave C. Wave 3 is not the right size - it reaches only 78% of recovery (for details, see the "butterfly effect" in the number 24).
Models Gartli mainly occur in the correctional market. 5-Elliott wave patterns occur most frequently on the impulse market. The following demonstrates how the market had been raised, ranging from a minimum of 2003. Model Gartli should be a model for Gartli because the market, although improving, is in a bear trend.
How do I sell? Here are two of the day, which are excellent examples of combinations of models and Elliott wave patterns butterfly Gartli. The market has formed a triangle, which was broken at the bottom of the beautiful in the 5-wave structure. All the proportions of the Fibonacci met.
Mismatch model, a developing right, goes up. This mismatch creates a wedge model, which is easier to notice in the next image.
Yellow arrows designated entry points.Do Fibonacci ratio for this? Yes. They must not only know but to be able to quickly design goals, once you feel that you are in the unfolding model.
Are some waves? Not quite. Often, Elliott's model does not give exact entry points, and it is necessary to move to a smaller format in the interim to find a more accurate log with a small risk. This is very good if there are other models, which confirm the 5-wave structure or a model of recovery. This may be GEPy, wedges, canals, etc.
The model presented below, has a lower maximum (LH) with divergence in the MACD. "HH" notes a higher maximum. "LL" - a lower minimum.
I knew that I was in wave 3? No, at that time did not. But I had a triangle, to confirm the trade, and during its implementation, I realized that this is a 3 wave.
Here's how the triangle in the afternoon level (red circle). Yellow dotted lines have not yet been, but the level of "C" (yellow horizontal line). As I see it: if the market will not be able to form wave 3, it will fail. What will indicate to fail? If AB = CD. Because the "C" did not reach 162%. And if the market fails, it will make 5 waves down.I held the lower border of the possible models of "head and shoulders." When the market did its five waves down, I expect that it would violate the neck in the 5th wave and provide an excellent opportunity for a short position. But this did not happen. The model did not work, and what happened when the script failed? The market went up like a bubble of air in the water. This is what happens when the failure of models - the market changes direction.
I knew that this day will trend upwards (red circle)? No, but a "head-shoulders" has failed and an excellent model of 1-2-3 was formed, at least 78% recovery Gartli.Formation observed range was excellent "1-2-3" to the lower ground - or double basis with a good divergence in MACD, bear this out.
All this is happening fast enough. You can not use it, if not in perfect proportion and you know the rules, at least, the models shown in this article. The study of Elliott Wave is gradual. First you learn the rules of proportion and then begin to recognize the form of waves, and these forms show you the calculation and the calculation tells you about the same proportions.Why not use the Elliott Wave? In this case, the size of the stop-orders would be too broad. Why not use the system log, on the basis of oscillators? Because I love the goal, I moved with Fibonacci ratios. I also love the Elliott Wave. I really like the shape. I like to assume when they become available. I like to take the wave. I love alternatives that Elliott wave theory suggests, on the market movement.
No comments:
Post a Comment