ALL ABOUT ELLIOT WAVES
Elliott Waves were introduced by Ralph Nelson Elliott in the 1930s for stock trading.
The theory is based solely on the phenomenon of mass psychology, which more often than not predetermines the outcome of the market behavior.
I am intrested in learning more about this type of analysis .
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Elliott waves have a huge degree of subjectivity. If you ask a group of Elliotticians to identify Elliott waves on the same chart they will most likely come up with several different wave counts.BUT The key to trading Elliott waves lies in not being always correct on the wave count, but rather finding the ways to get the least penalty for being wrong. While there are certain small windows in each price move,which promise some amount of profit regardless the actual wave count as long as direction is known, and that's what the Elliott wave theory does.[COLOR="Silver"]
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Impulsive Wave Patterns
1. Extended waves - waves that is elongated in nature with smaller sub-waves that are distinctively visible.
Among impulsive waves 1, 3 and 5 only one wave should become an extended wave.
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2. Diagonal triangle - applies to wave 5, which is prone to producing a weaker move/wave and as a result the sub-waves within it can evolve into a diagonal triangle.