Theory of Elliott Waves


elliot.png The Elliott Wave - EW Theory is named after Ralph Nelson Elliott. He discorved it in the 1930s. Elliott believed that all of man's activities, not just the stock market, were influenced by a identifiable series of waves. It's not a exactly science. Almost of EW traders have been lost their money. You should combine it with the orthers to analysis.

EW contains
Impulse patterns: 1-2-3-4-5
Corrective patterns: A-B-C
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Rules of EW
Rule 1: Wave 2 can never retrace more than 100% of wave 1.
Rule 2: Wave 3 can never be the shortest of the three impulse waves.
Rule 3: Wave 4 can never end in the price territory of Wave 1.


Caculation
Wave 3 = 1.618 * Wave 1
Wave 2 = 0.618 * Wave 1
Wave 4 = 0.382 * wave 3
Wave 5 = Wave 1
Wave B = Usually 50% of Wave A
Wave C = 1.618 times wave A or beyond.
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Note:
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Double Three

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