Forex Teach

Elliott Wave <<

In Fig. 4.1 the most complete and thoroughly disclose such things as the relative motion of the phenomenon, the phenomenon of wave level and shape. This diagram can clearly be seen the fundamental law, the essence of which lies in the distribution of wave characteristics of each market cycle. The order of distribution described later.

So, all levels consist of a number of waves:

• The cycle is formed by summing the motive and corrective waves;
• The highest level is defined as 1 +1 = 2;
• Next in significance level of 5 + 3 = 8;
• Then the observed level of 21 13 = 34;
• Then, dropping down another level, mark 89 55 = 144.

Note that the end point in the development of waves is seen in Fig. 1-4, as the waves do not stop its development in the figures examined in Figures 1-2, 1-3. Completion of the cycle has not changed, still it closes the end of the next vosmivolnovogo movement, consisting of five movements up and three - down. Thus, it is converted to two-cycle wave components, is related to the new wave level. Formation of the highest levels of the wave depends on the wave of development, ie wave levels have ground for growth only when there is formation of the waves themselves. Has no endpoint, and the opposite process, in which the wave is breaking levels.

By the way, Elliott was not asked to explain or even suggest why it is growing five and three waves sliding up the basic structure of the market. Thus, this structure is declared by Elliott, but not one hundred percent proof. So, maybe, "5 +3" is not a basic structure? But after some thought nevertheless be concluded that the most cost-effective forward movement is achieved by precisely this necessary minimum, combining positive and negative movement. The formation of the rollback is not possible with a single wave for its formation must be at least three. The main direction of movement must include at least five waves, or exceed the three-wave pullback would be impossible. That is achieved progress in a certain direction and the ability to contain the three waves. Similar results can be achieved and with more waves, but the most efficient model is the "5 +3". This figure - the guarantee of a positive outcome.

NOW A LITTLE MORE

On the wave level

There is a conventional classification of waves in the wave level or relative size. In his works, Elliott singled out among the small and large bending wave nine hour chart levels. Such results, he was able to obtain data on the basis of the time. Legend Elliott levels are shown in Table:

Note that these category names are strictly reserved for certain levels of the waves. As an example, consider becoming a U.S. stock market in 1932, this event should be seen as the wave Superuroven, which is divided into the following waves:

• 1st wave of the Basic level (1932-1937);
• 2nd wave of the Basic level (1937-1942 biennium);
• Third wave of the Basic level (1942-1966 biennium);
• The 4th wave of the Basic level (1966-1974);
• The 5th wave of the Basic level (1974-19? Years).

In turn, the waves of the ground level are divided as follows:

Basic level Waves / Wave Primary level / wave Intermediate Level / Secondary Level Wave / wave lower levels.

Using this structure, the expert is able to calculate the position occupied by the wave in the fast changing market. That is, the definition of a point in the general course of history the way the market is similar to the calculation of longitude and latitude geographic location.

To avoid confusion, it should be denoted by the waves on the trajectory of the market, guided by a particular system. An example of such a system is shown in the table below:

Scientists tend to use such forms of writing, like 11, 12, 13, 14, 15, etc., with lower indices, which indicate the level of the wave. But for the average person reading this entry on the chart would be a very painful procedure. That is why the tables are similar to published earlier, which facilitate visual orientation. It is also an excellent tool for navigation are different colors on the charts, which help to determine the levels of the wave.

As for terminology, Elliott did not put deep meaning into their definitions. So, for example, the concept of "basic level" is not to say that it is a starting point, and the name "intermediate" indicates only the position of the wave level between primary and secondary. Thus, the role of terminology in the calculation of the relative levels of the waves is not fundamental. And the changes and amendments to the special terminology initiated by other authors, in no way argued, moreover, the definition of Elliott have become classics.

The law of waves lie difficult to perceive moments, one of which is the exact calculation of the wave level. Perhaps the greatest difficulty arises in the primary reference of the resulting structure to a particular level of the wave. The outcome of this problem lies in the fact that the wave level is not tied to specific time frames or cost. Here is the basic form of which depend on the price and time (functional dependence). That is, the size and position in the wave space (relative to other waves) determine the level of the wave of a figure.

It is this relativity is one of the features of the Wave, for which the interpretation of the wave process in real-time refers to the category of intellectual tasks. Reliable forecasting is usually based not on the exact level of the wave, and its relative equivalent, which greatly facilitates the process of forecasting. At the same time, to create reliable forecasts affects the variability of forms.

Waves and their functions

Every wave, regardless of its level and distinctive features, performs a dual function associated with the action (action) and reaction (reaction). Thus, any wave can favor the development of the wave, located above the level, or vice versa, to interrupt its development. Determination of the wave function is in its relative direction. The category of interacting waves (actionary or trend) are the wave development is carried out in the same direction as the waves and the development of one level higher.

Opposing waves (reactionary or countertrend) is considered to be a wave developing in the opposite direction with respect to the higher waves. In both cases, the opposing force, and the waves are part of the wave at higher levels.

In order to limit the sphere of influence and the current wave of rapid recognition tag letters (a, c, e, g, i *) or odd numbers. While opposing waves are denoted even numbers and letters (b, d, f, h *).

All the opposing waves, regardless of their level and wave characteristics, develop in corrective style. However, not all develop in the current wave of driving style. The vast majority of the interacting waves is divided into 5 waves, but some of the waves are divided into three subwave therefore develop in corrective style. The wording of the differences between the current function and the driving style of the waves is quite complex and ambiguous. Therefore, the study of model structures of the surface in this case is insufficient for the formation of objective findings.

Other entries on the topic:

Lesson 1: Basic model

Lesson 2: The Subtleties of the full cycle

Lesson 4: The pulse wave

Lesson 5: Oblique Triangles

Lesson 6: The Zigzags

Lesson 7: Plane correction (3-3-5)

Lesson 8: Horizontal triangles

Lesson 9: Combinations such as corrective

Lesson 10: Direction of alternation

Lesson 11: Analyzing and forecasting the development of corrective waves

Lesson 12: The Education Channel

Lesson 13: Additional information

Lesson 14: Personality as one of the characteristics of wave

Lesson 15: From theory to practice ...