An Elliott Wave has two basic phases: an impulse or motive phase, and a reactionary or corrective phase. The impulse phase always moves in the direction of the trend, whereas the corrective phase moves against it. This would mean in a bullish market; the impulse phase will be moving upward while the corrective phase will be moving downward. In a bearish market the opposite will occur, meaning the impulse phase will move downward and the corrective phase will angle up.
In addition to the basic wave structure, there are also a variety of counting rules that go along with Elliott Wave analysis. For example, Wave 3 cannot be the shortest wave and Wave 4 cannot overlap the price territory of Wave 1. There are many such rules which constrain the wave counts possible for a given instrument. In the past, the complexity and variety of the wave counting rules made it difficult for a non-professional to effectively use Elliott Wave analysis in their trading.
Using Elliott Wave successfully means keeping it simple. This class was developed to provide you with the basic tools needed for a solid understanding of basic Elliott Wave structures: the 5-wave (impulse) pattern and the 3-wave (corrective) pattern. You can successfully trade using Elliott Wave analysis by following only three basic rules accompanied by a handful of guidelines.
Each Elliott Wave structure defines the trend and the market's next likely move. With a solid understanding of these simple rules and guidelines, you will gain confidence in counting a chart, which can result in a better understanding of the item's price potential.
Basic Tools for understanding Elliot Wave Structure
Successful Trade with Elliot Wave Technical Analysis
How to read the charts with Elliot Wave Structure
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