- The impulsive move
- The corrective move.
The impulsive waves can occur both in an uptrend and a downtrend. Impulse theory summary;
It takes the form of 5+3 wave = 8 Wave patterns.
It has the three waves 1, 3, 5 moving in the direction of the trend, the motive waves, and two waves 2 and 4 which move against the trend.
Waves 1, 3, 5 can further be divided into five smaller waves each while 2 and 4 into 3’s.
Corrective Wave Cycle:
The corrective wave comprises 3 waves moving in the opposite direction of the initial trend. Corrective patterns theory summary;
This wave pattern can never move beyond the origin of the previous impulse wave.
The letters a, b, c are used to label these waves respectively.
The 3 main rules trading .