📓Back in 1930, Ralph Nelson Elliott decided to figure out how the market works. After a long analysis of the charts, Elliott made a discovery that still does not lose its relevance. Elliott was able to identify the "breath" of the market. This new method of graph analysis is called Elliott Wave Analysis. As it turned out, the theory of wave analysis can be used on all timeframes and assets.
🚀The basis of the analysis is the idea that the market moves by impulses and corrections. As Elliott noted, the trend movement consists of 5 waves - 3 impulsive and 2 corrective, after which a correlation of three waves against the trend begins.
❗️There are a couple of rules worth remembering when determining waves:
1. Wave 2 never recovers more than 100% of wave 1. Usually the recovery is from 50% to 61.8% of wave 1.
2. Wave 4 never recovers more than 100% from wave 3. It usually declines between 38.2% and 50% of wave 3.
3. Wave 3 always extends beyond the end of wave 1 and is never the shortest; Wave 3 usually expands by 161.8 x wave 1.
It is important to remember these rules in order to correctly identify the waves.
In order not to make a mistake or go ahead of time, it is worth looking for the end of the second wave and go to the third, since it is the strongest and will bring the most profit. Indicators such as: MACD, RSI can be used to accurately determine the wave.
📌There are a couple more observations that will help your profitable trading:
-If wave 3 is the longest wave, then wave 5 will be approximately equal to wave 1.
-Wave 2 and Wave 4 will alternate. If wave 2 represents a sharp correction, wave 4 represents a flat correction and vice versa.
-After the sequence of five Elliott waves is completed, the ABC corrective waves usually end near the bottom point of wave 4.
🏆In order to learn how to correctly identify waves, enter a position in time and exit it in time, you need experience, so follow the charts, analyze and eventually the profit will come to you. Good luck!
🚀The basis of the analysis is the idea that the market moves by impulses and corrections. As Elliott noted, the trend movement consists of 5 waves - 3 impulsive and 2 corrective, after which a correlation of three waves against the trend begins.
❗️There are a couple of rules worth remembering when determining waves:
1. Wave 2 never recovers more than 100% of wave 1. Usually the recovery is from 50% to 61.8% of wave 1.
2. Wave 4 never recovers more than 100% from wave 3. It usually declines between 38.2% and 50% of wave 3.
3. Wave 3 always extends beyond the end of wave 1 and is never the shortest; Wave 3 usually expands by 161.8 x wave 1.
It is important to remember these rules in order to correctly identify the waves.
In order not to make a mistake or go ahead of time, it is worth looking for the end of the second wave and go to the third, since it is the strongest and will bring the most profit. Indicators such as: MACD, RSI can be used to accurately determine the wave.
📌There are a couple more observations that will help your profitable trading:
-If wave 3 is the longest wave, then wave 5 will be approximately equal to wave 1.
-Wave 2 and Wave 4 will alternate. If wave 2 represents a sharp correction, wave 4 represents a flat correction and vice versa.
-After the sequence of five Elliott waves is completed, the ABC corrective waves usually end near the bottom point of wave 4.
🏆In order to learn how to correctly identify waves, enter a position in time and exit it in time, you need experience, so follow the charts, analyze and eventually the profit will come to you. Good luck!