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Basic patterns of Elliott Wave Theory ExplainedTHE INTRODUCTION As you all know the waves always moves in zig zag fashion, either it moves up or it moves down, but the pattern always remains same i.e. Zig zag. So, the most important question is, with which method one can define the trend or some meaningful pattern, which can help anyone to plan his trade & other opportunities. There are multiple technical indicators available which can help to identify the patterns. However, the method which I use is The great Elliott Wave Theory. In this post I would like to summarize all of the basic Elliott Wave patterns. Here, in the Elliott Wave world, waves are always of two types. 1- Impulsive 2- Corrective CYCLE Whenever one impulse and corrective waves get combined one cycle is formed. Here, I have drawn the graphical representation of same. IMPULSIVE WAVES A Impulse is the combination of five wave structure, where all five waves are termed as: wave: 1,2,3,4 & 5 SUB STRUCTURE: Here, wave 1, 3 & 5 always sub divides into five smaller waves (*) (•)Waves 1 & 5 sometimes also gets converted into leading diagonal & ending diagonal. And, waves 2 & 4 always gets completed into a combination of three wave s structure. (structures could be simple or complex) (A separate topic) (also called as the corrective waves) CORRECTIVE WAVES ZIG ZAG Zig Zags are the pattern having the combination of three waves. (Wave a, b & c) Where, Wave A, subdivides into five waves , Wave B, sub divides into three waves and, Wave C, sub divides into five waves Here, I have drawn graphical representation of same. FLAT FLATS are the pattern having the combination of three waves. (Wave a, b & c) Where, Wave A, subdivides into three waves Wave B, sub divides into three waves And, Wave C, sub divides into five waves Here, I have drawn graphical representation of same. TRIANGLES A Triangle is the side ways price moves, bounded by converging trend lines. Internal wave in a triangle sub divides into 5 sub waves, named as A,B,C,D & E which further sub divides into 3 sub waves. Triangle often called as the terminating waves patterns, as it always terminates the big wave structure. LEADING DIAGONAL It consists of five sub-waves, labeled 1-2-3-4-5, Here, waves 1 & 4 always overlaps (exception) & Here, wave 1,3,5 sub divides into 5 sub waves & waves 2,4 sub divides into 3 sub waves. ENDING DIAGONAL It also, consists of five sub-waves, labeled 1-2-3-4-5, Here, waves 1 & 4 always overlaps (exception) & Here, wave 1,2,3,4,5 sub divides into 3 sub waves The patterns explained above are some of the basic patterns of " The Elliott Wave Theory" In future I would to cover separate topic in great detail.. Stay Tuned....
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RELIANCE : WOLFE WAVE : NEXT IMP. LEVELAfter continuous 3 downside impulsive waves now the RELIANCE chart has made a Wolfe's Wave with a beautiful breakdown of bottom line. Furthermore, according to Price Action, RELIANCE has form a good reversal pattern by making a HIGHER LOW and gave a good closing near previous SWING HIGH. And if the STOCK now moves above its previous HIGH then it will enter into the channel again and according to Wolfe's Wave the Target for the Stock will be the upper Incline Line. But there is a very very important level which can show a resistance to the STOCK which I have market in CHART with RED COLOUR.
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