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Elliott Wave Basics (Part 4)
03/06/2008 12:00 am EST
There are a few basic rules that wave counts need to follow to be considered impulsive waves.
1) The basic rule is that wave 4 cannot violate wave 1. That is, wave 4 cannot go into the territory of wave 1. That would make it a motive wave and not an impulsive wave.
2) Wave 3’s of an impulse pattern are usually the longest wave, and never the shortest.
There are numerous variations of wave extensions, but those are the basic rules.
For further study, one needs to keep in mind that waves usually have a relationship in length and even time. I use Fibonacci ratios to compare relative wave lengths and retracements in my updates. Go to Shepwave.com’s educational and research link to get further information of these ratios.
As mentioned in various sections of Shepwave.com, there are plenty of resources to gain knowledge of Elliott Wave Theory. I mention Robert Prechter, Jr. frequently and suggest that everyone read his book Elliott Wave Principle, along with his other publications. The Web site Elliottwave.com is a great site to find information. Another Web site that I suggest is Wavespeak.com. They also have a free Elliott Wave tutorial. I recommend reading it as well.
Good luck in your trading and investments.
|Part 1 | Part 2 | Part 3 | Part 4|
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