Elliott Wave Theory is named after Ralph Nelson Elliott (28 July 1871 – 15 January 1948).
3 Cardinal Rules of the Elliott Wave Theory
Rule Number #1: Wave 3 can NEVER be the shortest impulse wave
Rule Number #2: Wave 2 can NEVER go beyond the start of Wave 1
Rule Number #3: Wave 4 can NEVER cross in the same price area as Wave 1
Wave 2 will develop into a zigzag, flat, or combination. Wave 2 cannot be a triangle in its entirety Wave 4 will develop into a zigzag, flat, combination, or Triangle. On rare occasions, Wave 5 will not move beyond the pivot of wave 3. This is known as Truncation
Ratios:-
Ratios for Wave 2 Fibonacci Rule for Wave 2: Wave 2 is always related to Wave 1. Common Ratios for Wave 2: Wave 2 = either 50% of Wave 1 or 62% of Wave 1
Ratios for Wave 3 Wave 3 is related to Wave 1 by one of the following: Wave 3 = either 1.62 x length of Wave 1 or 2.62 x length of Wave 1 or 4.25 x length of Wave 1 The most common multiples are 1.62 and 2.62. However, if the 3rd Wave is an extended wave, then 2.62 and 4.25 ratios are more common.
Ratios for Wave 4 Wave 4 is related to Wave 3 by one of the following: Wave 4 = either 24% of Wave 3 or 38% of Wave 3 or 50% of Wave 3 The 24% and 38% are the most common ratios for Wave 4
Ratios for Wave 5 Wave 5 has two different relationships. Both are shown below. If Wave 3 is greater than 1.62 or extended, then Wave 5 ratios are as follows: Wave 5 either = Wave 1 or = 1.62 x Wave 1 or = 2.62 x Wave 1
Wave 5 Extended if Wave 3 is less than 1.62 X Wave One 5 = .62 X Length of 0 to 3 5 = 1 X Length of 0 to 3 5 = 1.62 X Length of 0 to 3
If Wave 3 is less than 1.62, Wave 5 ratios are as follows: When Wave 3 is less than 1.62, the 5th Wave overextends itself. From research, the ratio of Wave 5 will be based on the entire length from the beginning of Wave 1 to the top of Wave 3. Extended Wave 5 = either 0.62 x length (beginning of Wave 1 to top of Wave 3) or = length of (beginning of Wave 1 to top of Wave 3) or = 1.62 x length of (beginning of Wave 1 to top of Wave 3)
Thank you for your valuable contribution to the Tradingview community and keep up the good work!
keshevdugar
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nice job buddy... very few articles are written by heart...this is one of them🔥
pagarej
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how to find wave 3
fearfulme
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👍🏻👍🏻
islamainul
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Dada you are best person in this market . Your motive is always to help small traders. I am not a trader but following you since last 2 yrs and will for learning . Your analysis is found 100% accurate . Love you for helping people
amolpharande53
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best simple thnks
Ibhushanpatil
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👍
pankajtamesh9
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👍
JagdishKumarPahuja
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Well, Elliott's wave summary is great it needs practice & more practice to identify the correct wave count. Everyone's counts are never matching. Also, choosing a timeframe is very important. Can you suggest any software for automatic wave count? I appreciate your summary of wave movement.
subhagghosh
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@JagdishKumarPahuja automated system doesn't works, it better to use your own eye to catch it, and if u very good at price action....u can catch best of the moves.
Thank you for your valuable contribution to the Tradingview community and keep up the good work!