Elliott Wave En

8/14/2019 Elliott Wave En

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Background Ralph Nelson Elliott) (1871 - 1948) studied

the wave phenomena of the US stock

market in 1934 Published the Wave Principle in 1938

Published the Nature Law in 1942

In 1970s, Robert Prechter, Jr. made ElliottWave Theory popular in the investingcommunities

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Theory Outline Market fluctuations due to:

Impulse Wave

Corrective Wave Impulse wave

follows the trend

composes of 5 sub-waves

Corrective wave moves against the trend

Composes of 3 sub-waves

Waves within waves

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1

2

3

4

(1) 5

(2) c

a

b

1

2

3

4

(3) 5

a

b

(4) c

1

2

3

4

(5) 5

1

2

3

4

(a) 5

a

b

(b) c

1

2

3

(c) 5

4

Waves within

Waves

By counting waves in the longterm to short term charts,forecasting can be made

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Time / Price Structure ofFinancial Markets

Fluctuations according to: the Fibonacci Number Series

Fractal Structure

Non-linearity

Asymmetry

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Wave Counting Principle

2nd wave should not exceed the beginning

of 1st

wave 3rd wave should not be the shortest

among 1st, 3rd and 5th wave

No overlapping between 4th and 2nd wave(with exception in diagonal triangle)

Rule of alteration 2nd and 4th waves takedifferent wave forms

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1

2

3

4

5

1

2

CorrectWrong

End of 2nd wave should not exceedthe beginning of 1st wave

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1

2

3

4

5

Correct

Wrong

1

2

(i)

(ii)

(iii)

3rd wave

should not bethe shortestamong 1st, 3rd

and 5th

wave

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1

2

3

4

5

Correct

Wrong

(i)

(ii)

(iii)

1

2

4th wave

should notoverlap withthe 2nd

wave(except fordiagonaltriangle)

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1

2

3

4

5

Correct

Correct

1

2

3

4

5

Rule of

Alteration2nd and 4th

wave take

differentforms

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3 Wave Forms in Impulse Wave (1)

Extension

One of the 1st , 3rd and 5th wave will extendconspicuously

3rd wave would not be the shortest among1st, 3rd and 5th wave

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1

2

3

4

5

1

2

3

4

5

1

2

3

4

5

1st waveextension

3rd waveextension

5th waveextension

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Diagonal triangle Wave structure in upward or downward diagonal

triangle

In a form of contracting or expanding triangle

The sub-waves in the diagonal triangle take thestructure of 3-3-3-3-3

If diagonal triangle appears at the 1st wave, itwill take the structure of 5-3-5-3-5

The 2nd and the 4th sub-wave will overlap

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2

3

4

5

Contracting

diagonalTriangular5th wave

1

2

3

4

5

Expanding

diagonaltriangular5th wave

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1

2

3

4

5Contractingdiagonaltriangular1st wave

Expandingdiagonaltriangular1st wave

1

2

3

4

5

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5th wave extension 5th wave failed to exceed the 3rd wave end

5th wave takes a structure of 5-3-5-3-5

failure to have the momentum to breath into

new high / low before reversal

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1

2

3

4

5

Upward 5th wavefailure

Downward 5th wavefailure

1

2

3

4

5

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Corrective Wave Structure 4 simple structures in corrective wave

Zig-Zag

Flat Irregular

Horizontal Triangle

2 complex structures in corrective wave Double Three

Triple Three

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Zig Zag (5-3-5)

a

b

c

a (i)

(i)

(ii)

(iii)

(iv) a

b

b c

(i)

(ii)

(iii)

(iv)

c (v)

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Flat (3-3-5)

a

b

c

a c

a

b a

b

b c

(i)

(ii)

(iii)

(iv)

c (v)

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Irregular (3-3-5)

a

b

c

a c

a

b a

b

b c

(i)

(ii)

(iii)

(iv)

c (v)

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Horizontal Triangle (3-3-3-3-3)

a

b

c a

b

c

d

e

d

e

a

b

c

a

b

c

d

e

d

e

Contractinghorizontaltriangle

Expandinghorizontaltriangle

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Double-three

a

b

x c

a (i)

(i)

(ii)

(iii)

(iv) a

b

b c

(i)

(ii)

(iii)

(iv)

c (v)

a c

a

b a

b

b c

(i)

(ii)

(iii)

(iv)

c (v)

a

b

c

x

a

b

c

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Triple-three

a

b

x c

a (i)

(i)

(ii)

(iii)

(iv) a

b

b c

(i)

(ii)

(iii)

(iv)

c (v)

a c

a

b a

b

b c

(i)

(ii)

(iii)

(iv)

c (v)

a

b

c

x

a

b

c

bx

a c

a c

a

b

a

b

b c

(i)

(ii)

(iii)

(iv)

c (v)

a

b

x c

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2

Elliott Channel (1)

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Elliott Channel (2)

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3

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Elliott Channel (3)

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2

3

4

5Elliott Channel (4)

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1

2

3

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(1) 5

(2) c

a

b

1

2

3?

Elliott Channel (5)

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1

2

3

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(1) 5

(2) c

a

b

1

2

3

4

(3) 5

Elliott Channel (6)

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1

2

3

4

(1) 5

(2) c

a

b

1

2

3

4

(3) 5

a

b

(4) c

(5) 5?

Elliott Channel (7)

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1

2

3

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(1) 5

(2) c

a

b

1

2

3

4

(3) 5

a

b

(4) c

1

2

3

4

(5) 5

Elliott Channel (8)

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1

2

3

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(1) 5

(2) c

a

b

1

2

3

4

(3) 5

a

b

(4) c

1

2

3

4

(5) 5

1

2

3

4

(a) 5

Elliott Channel (9)

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1

2

3

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(1) 5

(2) c

a

b

1

2

3

4

(3) 5

a

b

(4) c

1

2

3

4

(5) 5

1

2

3

4

(a) 5

a

b

(b) cElliott Channel (10)

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1

2

3

4

(1) 5

(2) c

a

b

1

2

3

4

(3) 5

a

b

(4) c

1

2

3

4

(5) 5

1

2

3

4

(a) 5

a

b

(b) c

1

2

3

(c) 5

4

Elliott Channel (11)

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acrotec.comItem Details

Book Name Elliott Wave Principle: Key to Market

BehaviorAuthor Robert Prechter and A.J. Frost

Contents The basic tenets of wave theoryThe rules and guidelines of wave analysisThe scientific background of the Wave

Principle and Long term waves

Item Details

Book Name R. N. Elliott's Masterworks: The DefinitiveCollection

Editor Robert Prechter, Jr.

Contents "The Wave Principle" (1938)The Financial World articles (1939)Nature's Law -- The Secret of the Universe(1946)

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