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the theory of Elliott and cycle times

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Introduction to the theory of Elliott and cycle time:

Technical Analysis for the financial markets based on the principle that to find out what happened in the past and analysis can tell us what can happen in the future, and there are a lot of technical analysis tools that help application of this principle is the theory of Elliott of the most important of these tools.

Smit theory that name Elliot Waves proportion to Ralph Nelson Elliott, founder theory where he noted that financial markets are moving within chains sequential certain models, and found that there are 11 model and each model is a wave that has a name length and time of each wave within waves smaller ones, and when completed one of these waves is called a cycle.

Cycle time:

The Elliott and then continued development of several theoretical classifies each wave by the time of completion to specific items, as in the following table:

Where is the cycle time in Elliott time relative to a large extent, but when you study for the third quarter and the fourth will learn how to take advantage of the cycle time.

The nature of the wave motion

Each session wave moving according to 8 waves in the standard format, five waves of waves called driving waves moving in the general direction and three corrective waves move to reverse the trend.

The called Payment waves from the numbers 1,2,3,4,5, including two waves moving the opposite direction and are the second and fourth wave, where the movement of the driving wave as follows:

The first wave in the general direction.

The second wave reverse the general trend.

Third wave in the general direction.

Fourth wave reverse the general trend.

Fifth wave in the general direction.

Therefore called waves 1, 3 and 5 waves of momentum, while the Wave 2 and 4 called deficient waves.

Having finished fifth wave begins three corrective waves, and be in the direction of including corrective wave B regressive moving in the general direction, driving waves called C, B and A letters.

Where the movement is as follows:

A wave reverse the general trend.

B wave in the general direction.

Wave C to reverse the trend.

This figure illustrates the eight waves composing each session in its standard form:

In the previous illustration model for full wave cycle on the upside, and we note here the general trend is direction of waves payment.

It can be the general trend upward trend in the market bullish or bearish market Atjahaabott.

- Internal waves wave:

Each wave carrying smaller inside waves within the cycle of smaller ones, and be

Internal waves within wave standard as follows:

The first wave: 5 waves.

The second wave: 3 waves.

Third Wave: 5 waves.

Fourth wave: 3 waves.

Fifth wave: 5 waves.

Five waves. : A wave

Three waves. : B wave

Five waves. : C wave

The following figure shows internal waves for the full course simplified:

Where each wave is composed of internal waves and each wave of internal waves also contain waves accurately, and this applies to the eleven sessions.

- The general rules of the wave:

1 - must be shorter wave 2 of wave 1 (ie, not the landing of the second wave down the beginning of the first wave in the case of the upward trend, and the rise of the second wave from the beginning of the first wave in the case of the downward trend).

2 - should not be a third wave the shortest waves between waves momentum first and fifth.

3 - You do not share the wave 4 with wave 2 in the area of ??price and one (which does not fall lower fourth wave of the top of the first wave in the upward trend, rising fourth wave off the bottom of the first wave in a downtrend).

We finished identify the nature of wave motion in general, and what has been dealt with here is the simple waves, but there are several models for each of the driving waves and corrective waves

I hope this article help new trader to know more about elliott wave.
Date: Feb 21, 2013   


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