Elliot
Wave Basic: Part-4
Three Rules
Believe it or not, there are only three rules when it comes to interpreting Elliott Wave. There are many guidelines, but only three HARD rules. These are unbreakable. Guidelines, on the other hand, are bendable and subject to interpretation. Furthermore, these rules only apply to a 5-wave impulse sequence. Correction, which are much more complicated, are given more leeway when it comes to interpretation.Rule 1: Wave 2 cannot retrace more than 100% of Wave 1.
Rule 2: Wave 3 can never be the shortest of the three impulse waves.
Rule 3: Wave 4 can never overlap Wave 1.
Wave
2 cannot move below the low of Wave 1. A break below this low would call for a
re-count. Even though Wave 3 is typically the longest of the three impulse
waves, there is a specific rule that it cannot be the shortest. 1 or 5 can be
longer than Wave 3, but both cannot be longer than Wave 3. It is probably best
to use percentages or log scales when measuring Wave length. Elliott Wave
indicates that Wave 3 must exceed the high of Wave 1. Failure to exceed this
high would call for a re-count. Impulse moves are all about making progress.
Failure to exceed the high of Wave 2 would not be making progress. The third,
and final rule, is that Wave 4 cannot overlap Wave 1, which means the low of
Wave 4 cannot exceed the high of Wave 1. Such a violation would call for a
re-count.
***For read "Elliot Wave Basic, Previous Part", Please click the link below..
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.