FOREX THEORY
Riding Elliott’s Waves
-Elliott Waves are fractals. Each wave can be split into
parts, each of which is a very similar copy of the whole. Mathematicians like
to call this property “self-similarity”.
-A trending market moves in a 5-3 wave pattern.
-The first 5-wave pattern is called impulse wave.
-One of the three impulse waves (1, 3, or 5) will always be
extended. Wave 3 is usually the extended one.
-The second 3-wave pattern is called corrective wave.
Letters are used instead of numbers to track the correction.
-Waves 1, 3 and 5, are made up of a smaller 5-wave impulse
pattern while Waves 2 and 4 are made up of smaller 3-wave corrective pattern.
-There are 21 types of corrective patterns but they are just
made up of three very simple, easy-to-understand formations.
-The three fundamental corrective wave patterns are
zig-zags, flats, and triangles.
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