Elliott Wave Patterns
Tried to capture Elliott Wave Theory Patterns:-
Elliott Wave Theory is named after Ralph Nelson Elliott (28 July 1871 – 15 January 1948).
3 Cardinal Rules of the Elliott Wave Theory
Rule Number #1: Wave 3 can NEVER be the shortest impulse wave
Rule Number #2: Wave 2 can NEVER go beyond the start of Wave 1
Rule Number #3: Wave 4 can NEVER cross in the same price area as Wave 1
Wave 2 will develop into a zigzag, flat, or combination. Wave 2 cannot be a triangle in its entirety
Wave 4 will develop into a zigzag, flat, combination, or Triangle.
On rare occasions, Wave 5 will not move beyond the pivot of wave 3. This is known as Truncation
Ratios:-
Ratios for Wave 2
Fibonacci Rule for Wave 2:
Wave 2 is always related to Wave 1.
Common Ratios for Wave 2:
Wave 2 = either 50% of Wave 1
or 62% of Wave 1
Ratios for Wave 3
Wave 3 is related to Wave 1 by one of the following:
Wave 3 = either 1.62 x length of Wave 1
or 2.62 x length of Wave 1
or 4.25 x length of Wave 1
The most common multiples are 1.62 and 2.62. However, if the 3rd Wave is an
extended wave, then 2.62 and 4.25 ratios are more common.
Ratios for Wave 4
Wave 4 is related to Wave 3 by one of the following:
Wave 4 = either 24% of Wave 3
or 38% of Wave 3
or 50% of Wave 3
The 24% and 38% are the most common ratios for Wave 4
Ratios for Wave 5
Wave 5 has two different relationships. Both are shown below.
If Wave 3 is greater than 1.62 or extended, then Wave 5 ratios are as
follows:
Wave 5 either = Wave 1 or
= 1.62 x Wave 1 or
= 2.62 x Wave 1
Wave 5
Extended if Wave 3 is less than 1.62 X Wave One
5 = .62 X Length of 0 to 3
5 = 1 X Length of 0 to 3
5 = 1.62 X Length of 0 to 3
If Wave 3 is less than 1.62, Wave 5 ratios are as follows:
When Wave 3 is less than 1.62, the 5th Wave overextends itself. From research,
the ratio of Wave 5 will be based on the entire length from the beginning of Wave
1 to the top of Wave 3.
Extended Wave 5 = either 0.62 x length
(beginning of Wave 1 to top of Wave 3) or
= length of
(beginning of Wave 1 to top of Wave 3) or
= 1.62 x length of
(beginning of Wave 1 to top of Wave 3)
Regards,
SG
Elliott Wave Theory is named after Ralph Nelson Elliott (28 July 1871 – 15 January 1948).
3 Cardinal Rules of the Elliott Wave Theory
Rule Number #1: Wave 3 can NEVER be the shortest impulse wave
Rule Number #2: Wave 2 can NEVER go beyond the start of Wave 1
Rule Number #3: Wave 4 can NEVER cross in the same price area as Wave 1
Wave 2 will develop into a zigzag, flat, or combination. Wave 2 cannot be a triangle in its entirety
Wave 4 will develop into a zigzag, flat, combination, or Triangle.
On rare occasions, Wave 5 will not move beyond the pivot of wave 3. This is known as Truncation
Ratios:-
Ratios for Wave 2
Fibonacci Rule for Wave 2:
Wave 2 is always related to Wave 1.
Common Ratios for Wave 2:
Wave 2 = either 50% of Wave 1
or 62% of Wave 1
Ratios for Wave 3
Wave 3 is related to Wave 1 by one of the following:
Wave 3 = either 1.62 x length of Wave 1
or 2.62 x length of Wave 1
or 4.25 x length of Wave 1
The most common multiples are 1.62 and 2.62. However, if the 3rd Wave is an
extended wave, then 2.62 and 4.25 ratios are more common.
Ratios for Wave 4
Wave 4 is related to Wave 3 by one of the following:
Wave 4 = either 24% of Wave 3
or 38% of Wave 3
or 50% of Wave 3
The 24% and 38% are the most common ratios for Wave 4
Ratios for Wave 5
Wave 5 has two different relationships. Both are shown below.
If Wave 3 is greater than 1.62 or extended, then Wave 5 ratios are as
follows:
Wave 5 either = Wave 1 or
= 1.62 x Wave 1 or
= 2.62 x Wave 1
Wave 5
Extended if Wave 3 is less than 1.62 X Wave One
5 = .62 X Length of 0 to 3
5 = 1 X Length of 0 to 3
5 = 1.62 X Length of 0 to 3
If Wave 3 is less than 1.62, Wave 5 ratios are as follows:
When Wave 3 is less than 1.62, the 5th Wave overextends itself. From research,
the ratio of Wave 5 will be based on the entire length from the beginning of Wave
1 to the top of Wave 3.
Extended Wave 5 = either 0.62 x length
(beginning of Wave 1 to top of Wave 3) or
= length of
(beginning of Wave 1 to top of Wave 3) or
= 1.62 x length of
(beginning of Wave 1 to top of Wave 3)
Regards,
SG
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