1-4Interesting Facts: Elliott Wave Theory is just a reflection of the
psychology of the traders and outside trend. Years ago it was believed
that events outside the market has less or no effect on the market
perhaps
now it is believed that market is influenced nonetheless the
influence is not that consistent. Elliott’s wave follows a pattern which
could help the traders derive a preferably close picture revealing what
will and what will not happen in the market in the near future with
least risk involved.
. 2-1Elliott Wave Pattern: Elliott Waves are of two types.
They are Impulsive and Corrective Waves, with impulsive being 1-2-3-4-5
and corrective being a-b-c. In the Impulsive waves, points that move
1-3-5 are separated by down waves 2-4.
Theory also says that each upward 5-wave will be followed by a downward
5-wave. In the downward 5-wave, 1-3-5 becomes down wave and 2-4 becomes
the up wave and this is just a reverse of the upward 5-wave. The second
downward 5-wave is nothing but the correction wave.
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