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Essential design

Now notice that in the correction model shown as wave [2] in Figure 1-3, waves (a) and (c), which point down, consist of five waves: 1, 2, 3, 4, and 5. Similarly, Wave (b) directed upward consists of three waves: a, b, and c. This design reveals an important point: the driving waves do not always point up, and the corrective waves do not always point down. The wave mode is determined not by its absolute direction, but primarily by the relative direction. In addition to the four specific exceptions that will be discussed later in this course, waves are divided in a motor mode (five waves) when moving in the same direction as a wave of one greater degree, of which it is a part, and in a corrective mode (three waves or variation ) when moving in the opposite direction. Waves (a) and (c) are moving and moving in the same direction as the wave [2]. Wave (b) is corrective because it corrects wave (a) and the oncoming tendency to wave [2]. So, the main trend underlying the wave principle is that the action in the same direction as one larger trend develops in five waves, and the reaction against one larger trend develops in three waves at all levels of the trend.
* Note: for this course, all initial degrees and letters, usually indicated by circles, are shown in brackets.
Lesson 3: Basic Concepts
Figure 1-4
Phenomena of form, degree, and relative direction are carried one step further in Figure 1-4. This illustration reflects the general principle that waves will be subdivided in any market cycle, as shown in the following table.
The number of waves at each degree
Impulse Correction = Cycle
The biggest waves 1 1 = 2
The largest units 5 3 = 8
The following divisions 21 13 = 34
The following units 89 55 = 144
As in Figures 1-2 and 1-3 in Lesson 2, neither finality is implied in Figure 1-4. As before, the completion of another movement with eight waves (five up and three down) completes the cycle, which automatically becomes two divisions of the wave of the next higher degree. As progress continues, the construction process continues to a greater extent. The reverse process of dividing into smaller degrees, apparently, continues indefinitely. So, as far as we can determine, all waves have and are constituent waves.
Elliott himself never thought about why the main form of the market was five waves for progress and three waves for regression. He simply noted that this was what was happening. Should the substantial form be five waves and three? Think about it, and you will realize that this is the minimum requirement and, therefore, the most effective method of achieving both fluctuations and progress in linear motion. One wave does not allow vibrations. The smallest number of units for creating oscillations is three waves. Three waves in both directions do not allow progress. Progress in one direction
Despite the periods of regression, movements in the main trend should be at least five waves, just to cover more land than three waves, and still contain fluctuations. Although there may be more waves than this, the most effective form of punctual progress is 5-3, and nature usually follows the most efficient path.
Variations on the main theme
The wave principle would be easy to apply if the main topic described above was a complete description of market behavior. However, in the real world, fortunately or unfortunately, is not so simple. From now on to Lesson 15, we will describe how the market behaves in reality. This is what Elliott intended to describe, and he succeeded.
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Erika Sanders

I haven't tried Forex trading, but I'm thinking about it. So, your info is useful for. Thanks!

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