Elliott Wave Basics (Part 2)
03/04/2008 12:00 am EST
The view of the chart below can be used to describe any time frame.
Basically, a one-minute chart of a market will display the same characteristics of a weekly chart of the same market. The motive or impulse directional waves will be able to subdivide into five waves of a smaller or larger degree. In a corrective wave, the wave could have impulsive/motive waves that can be broken down into a five-wave move within the three-wave corrective move of a larger degree.
The drawing above shows how a five-wave move subdivides. One can keep going to a smaller or larger degree and get the same wave look. Corrective patterns are what give most Elliotticians the most problems. They can have complex patterns that sometimes are difficult to indentify until they are finished. There are basically three types of corrective wave formations: the zig zag is a 5-3-5 wave formation, a flat correction is a 3-3-5 wave formation, and a triangle is a 3-3-3-3-3 formation.
Tomorrow's charts will show simple examples of these types of corrections.
|More in Part 3 tomorrow.||Part 1 | Part 3 | Part 4|
By Christian Shepard of Shepwave.com