I get a lot of questions about Elliott Wave but a particular question often received from the followers:
Where to start wave counting on the chart?
How do I begin/start wave counting on the chart?
How do you do Wave Counting?
I’m going to introduce working 3-tricks which are used by me while establishing Elliott Wave Counting on a chart. These are my steps/processes or tricks that can help you to start counting waves.
----------------------------------------------------------------- Trick 1: Begin with an Extreme High and Low ----------------------------------------------------------------- Key thing: you can actually begin the wave counting over the Extreme Low or Extreme High. It doesn’t matter if you start from extreme low or high. I am going to start Impulsive Wave Counting from Extreme Low in the middle of 2001.
The Wave Counting is quite simple on this chart with Wave 1,2 and nice acceleration in wave 3 that moves more confidently, wave 4 pullback and five-wave advance impulsive again. Now corrective phase, flat A, B, and C correction. This is a very easy and clear chart to identify wave counting.
----------------------------------------------------------------- Trick 2: Recognize the Pattern ----------------------------------------------------------------- Just simply ask yourself “Do I recognize the Pattern?” The answer is NO, then Okay
Next, ask yourself, Do I see a motive or corrective wave? Elliott Wave classification in two phases, Motive, and Corrective phases. If it’s a motive-phase(wave 1,2,3,4 and 5) then, you have two patterns to work with:
1. Diagonal and,
2. Impulsive waves.
Suppose to, its Corrective-Phase(A,B, and C) then, you have 3 patterns,
3. Flat,
4. Zigzag and,
5. Triangle.
This is a counter-trend move(Corrective Phase) having Zigzag Pattern A, B, and C.
----------------------------------------------------------------- Trick 3: Start in the middle and move forward ----------------------------------------------------------------- I don’t know what is going on but, in Aug 2013, the price moved 201 points from 69 to 271 which is a very strong upward move in a short period of time. This is a clean and clear sign of the 3rd wave.
If this move is Impulsive wave 3 then prior swing low can be labeled as wave (2) and prior swing high can be labeled as wave (1). Basically, it is Wave (1), (2), 1,2,3,4, and 5, (3), (4), and (5) motive phases.
More often, we may see gaps and price surges in a short period of time in Wave 3.
DON'T WORRY IF YOU ARE NEW IN WAVE ANALYSIS OR ELLIOTT WAVE. I CAN HELP YOU.
Thank you for your valuable contribution to the TradingView community and keep up the good work!
Good clear chart with good clear explanation.
Redfox-8
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@Angusmck, I do delivery based positional/swing trade. But, I am anxious about a bear market ( for example : from 2017 to 2019 bear market where most stocks are in downtrend and making lower low and lower high). Can you discuss some strategy which help us to survive even in long-term downtrend market. Is it true that in bear market some stocks are still in uptrend.
zAngus
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@Redfox-8, set a stop loss at an area of support / moving average ;)
sksenthilkumarp
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Have a look on nifty and Bank nifty weekly charts 1. Nifty had down from 12430 to 7511 and bank nifty also down to 16116 from 32000 level 2. First rally reverse low (7511) nifty has take a resist at 11794 and retrace at 10790 , 3 . Second rally from 10790 to 15431 and had a support at 14151 4. Nowadays nifty has broken it's resistance 15431 and the rally continues 5. Banknifty also reverse from its low 16116, had rally to 25232 and retracement 20404 (first rally), second rally to 37708 and had support at 30405 6. banks and financial services have 36% weightage in nifty, Nifty has broken it resistance without the help of bank nifty and forms new highs 7. All the experts nifty will reach 17500 level ( now Bank nifty is sustain below 37708, it's second resistance). 8. According to this criteria what is your view on nifty and bank nifty movements. Is the broken of 37708 will help to nifty go new high?
RM369
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Kennedy of Elliott Wave International has previously covered this. Can't say if it is original.
durgaprasadbehera111
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1+1=2 has also been taught by your teacher in your school days, but if you will be asked the same question what is 1+1, then will tell 2 or something else as becoz your teacher has told you in your childhood days?
RM369
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@durgaprasadbehera111,,,, Courtesy demands you acknowledge the source , especially if it is a master of the subject . Kennedy is.
Thank you for your valuable contribution to the TradingView community and keep up the good work!
Good clear chart with good clear explanation.