Basic wave principle

Elliott wave is the principle of analyzing market infrastructure. is like a road map Show us where we are. from top to bottom or from the bottom up, comparable to driving in a big city If you want to know where this path will lead us We may have to drive ourselves along a point-to-point route, but Elliott waves are not. Elliott waves are comparable to us driving a helicopter to see the city. We will see all roads converge or split.

Basic Elliott wave It consists of moving steps up and down or sideways from the point where The price moves to the point where the price changes its direction, we call it wave 1 and from the end of the previous wave becomes the beginning of a new wave.

Waves can be stretched or compressed by the ratio of time and price. But more important is the ratio of time and price. The price pattern is always fixed whether the time frame is bigger or smaller.

five wave pattern

In a combination of waves form a motion. But waves do not travel in a straight line. There is movement and it halts and goes on. cause movement in style Five wave based Elliott wave patterns, with three moving in the same direction, 1,3,5, and interrupted by 2,4 waves.

Wave Mode

Wave patterns are developed in two forms, Motive and Corrective. Motive waves have a 5-wave structure, while corrective waves have a 3-wave structure. Motive waves extending in the same direction as the main trend are labeled with numbers. inside It consists of three equal directional waves 1,3,5 and two opposite waves 2,4. and moving opposite to the direction of the main trend, within a corrective wave consisting of two waves of the same direction A, C are interrupted by wave B. Once both Motive and Corrective patterns are completed, they become part of the structure of the wave levels. bigger Therefore, the two Modes are fundamentally different in terms of their roles and structure.

One complete cycle consists of two phases of eight waves.

And when it's complete, it becomes part of the larger wave.

This fundamental principle is very useful to analysts in terms of trend identification when we encounter 5-wave Motive patterns, giving them a clue as to where the main trend of the price is going. Points of reversal within the trend, once the 3 wave corrective pattern is completed, the price will reverse to the main trend again.

But first, motive waves don't always need five, and corrective waves don't always need three. This is just the minimum requirements for Motive and Corrective, explained in the section on Extended Waves and Combination Waves, as for the direction of movement, Motives are not always pointing up and Correctives are not always pointing down. The wave action is not determined by a certain direction. But in principle it is determined by direction relative to the trend and the surrounding waves For example, if the main trend is up, the Motive wave is pointing up; if the main trend is down, the Motive wave is also pointing down.

In summary, the basic idea is Action in the same direction as the trend It usually happens in a 5-wave pattern. The reaction against the trend usually happens in a 3-wave pattern.

@ElliotticianThai