Rules and Guidelines for Elliott wave

Originally Posted by CreditViolet

Also lets not forget to add the 4th and 5th legs along with the Chicken Wing and then shake it for 15 minutes while doing the cha-cha-cha shake yourself.

From the CV Rules and Guidelines of making butter chicken

Originally Posted by carlo

The Elliot Wave theory

Elliot discovered that the ever-changing path of stock market prices reveals a structural design that in turn reflects a basic harmony found in nature. From this discovery, he developed a rational system of market analysis.

Under the Wave Principle, every market decision is both produced by meaningful information and produces meaningful information. Each transaction, while at once an effect, enters the fabric of the market and, by communicating transactional data to investors, joins the chain of causes of others’ behavior. This feedback loop is governed by man’s social nature, and since he has such a nature, the process generates forms. As the forms are repetitive, they have predictive value.
Wave Patterns

In markets, progress ultimately takes the form of five waves of a specific structure. Three of these waves, which are labeled 1, 3 and 5, actually effect the directional movement. They are separated by two countertrend interruptions, which are labeled 2 and 4. The two interruptions are apparently a requisite for overall directional movement to occur.

At any time, the market may be identified as being somewhere in the basic five wave pattern at the largest degree of trend. Because the five wave pattern is the overriding form of market progress, all other patterns are subsumed by it.

The 5 wave pattern is often followed by 3 corrective waves labelled as A-B-C.
Wave Mode

There are two modes of wave development: impulsive and corrective. Impulsive waves have a five wave structure, while corrective waves have a three wave structure or a variation thereof. Impulsive mode is employed by both the five wave pattern and its same-directional components, i.e., waves 1, 3 and 5. Their structures are called “impulsive” because they powerfully impel the market. Corrective mode is employed by all countertrend interruptions, which include waves 2 and 4. Their structures are called “corrective” because they can accomplish only a partial retracement, or “correction,” of the progress achieved by any preceding impulsive wave. Thus, the two modes are fundamentally different, both in their roles and in their construction, as will be detailed in an upcoming section.
Wave subdivision

Waves can be repeatedly subdivided into lower degrees as follows:
Some observations

* Wave 4 never overlaps or enters the area of wave 1. An overlap means one shd consider the possibility of A-B-C corrective
* An exception to the above is a 5th wave ending diagonal
* Wave 3 is never the shortest.
* Wave 3 & 5 are related to wave 1 by a Fibonacci ratio (equality or 1.618 or 2.618)
* In any corrective, wave C is related to wave A by a Fibonacci ratio (equality or 1.618 or 2.618)
* In any corrective, wave B is related to wave A by a Fibonacci ratio (0.618 or equality)
* Compared to impulses, correctives are difficult to trade. There are more than 23 types of patterns. Sometimes the best thing to do is let the market make up its mind and then decide what to do.
* In an impulse, it is common for a wave 3 or wave 5 to extend.
* Any correction following a 5th wave extension will typically end at wave 2 of the extension
* Alternation: if wave 2 is a sideways correction, wave 4 will be fast/ straight/ swift (and vice versa).
* Waves are fractal and principles apply across all time frames. A 1-2-3-4-5 impulse could be a part of larger A which in turn can be a part of a larger 1

Originally Posted by CreditViolet

Double and Triple ZigZag Rules:

Double (DZ) and Triple (TZ) Zigzags are similar to Zigzags, and are typically two or three Zigzag patterns strung together with a joining Wave called an x Wave, and are corrective in nature. Doubles are not common, and Triples are rare. Zigzags, Double Zigzags and Triple Zigzags are also known as Zigzag family patterns, or 'Sharp' patterns. Double Zigzags are labeled w-x-y, while Triple Zigzags are labeled w-x-y-xx-z. Both these patterns are included in the list of rules and guidelines below. Only a Double Zigzag is illustrated below.
Wave W must be a Zigzag.
Wave C of W cannot be a failure.
Wave X can be any corrective pattern except an ET.
Wave X must be smaller than Wave W by price.
Wave X must retrace at least 20% of W by price.
The gross price movement of Wave X must be less then 3 times the price movement of Wave W.
Wave X must be no more than 5 times Wave W by time.
Wave Y must be a Zigzag
Wave Y must be greater than or equal to Wave X by price.
Back to back and double failures are not allowed.
Wave Y must be greater than 90% of Wave W by price, and Wave Y must be less than 5 times Wave W by price.
Wave Y must be no more than a factor of 5 times either Wave X or W in price or time.
Wave C of Y cannot be a failure.
Wave XX can be any corrective pattern except an ET.
Wave XX must be smaller than Wave Y by price.
Wave XX must retrace at least 20% of Y.
The gross price movement of Wave XX must be less than 3 times the gross movement of Wave W.
Wave Z must be a Zigzag
Wave Z must be greater than or equal to Wave XX by price.
Wave Z must be less than 5 times Wave Y by price, and must also be less than 5 times Wave W by price.
Wave Z must be no more than a 5 times either Waves XX, Y, X or W in both price and time.
Double and Triple ZigZag Guidelines:
The largest Wave in Wave W is usually less than Wave W by price.
Wave X is usually a Zigzag family pattern.
Wave X is usually less than 70% of Wave W by price.
Wave X will usually retrace at least 30% of Wave W.
Wave X is most likely to be a 38.2% retracement of Wave W.
Wave X is next most likely to be a 50% retracement of Wave W.
Wave X is next most likely to be a 61.8% retracement of Wave W.
The largest Wave in Wave X is usually less than 140% of Wave W by price.
The time taken by Wave X is usually between 61.8% and 161.8% of Wave 1.
Wave Y is next most likely to be equal to 61.8% or 161.8% of W by price.
Expect the time taken by Wave Y to be between 61.8% of Wave W and 161.8% of shortest of Wave W and X.
Wave XX is usually a Zigzag family pattern.
Wave XX is usually less than 70% of Wave Y by price.
Wave XX will usually retrace at least 30% of Wave Y.
Wave XX is most likely to be a 38.2% retracement of Wave Y.
Wave XX is next most likely to be a 50% retracement of Wave Y.
Wave XX is next most likely to be a 61.8% retracement of Wave Y.
The largest Wave within Wave XX is usually less than 140% of Wave Y by price.
Wave Z is most likely to be about equal to Wave Y by price.
Wave Z is next most likely to be about equal to 61.8% or 161.8% of Wave Y.
The largest Wave in Wave Z is usually less than Wave Y by price.
Double and Triple Sideways Rules:

Double (D3) and Triple (T3) Sideways patterns are similar to Flats, and are typically two or three corrective patterns strung together with a joining Wave, called an x Wave, and are all corrective in nature. Doubles are not common, and Triples are rare. Doubles are labeled w-x-y, while Triples are labeled w-x-y-xx-z. Both these patterns are included in the list of rules and guidelines below. Only a Double 3 is illustrated below.
Wave W may be any corrective pattern except a Triangle, double or triple.
Wave C of W cannot be a failure.
Wave X may be any corrective pattern except a Triangle, double or triple.
The minimum X Wave retracement is 70% of Wave W.
The maximum price distance of Wave X is 150% of both the previous Wave and ensuing Wave. All internal data points are considered.
Although there is no minimum time for Wave X, the maximum time is 10 times the time taken by Wave W.
Wave Y may be any corrective pattern except double, triple or a Triangle in a Triple Zigzag. However, Wave Y cannot be a Zigzag if Wave W is a Zigzag.
Wave Y must be greater than or equal to Wave X by price, except if Wave Y is a Triangle.
Wave C of Y cannot be a failure.
Wave Y must be no more than 5 times either Wave X or W in price and time.
Wave Y has no minimum time constraint.
Wave XX may be any corrective pattern except a Triangle, double or triple.
The minimum Wave XX retracement is 70% of Wave Y.
The maximum Wave XX retracement is 150% of previous Wave and ensuing Wave. All internal data points are considered.
Wave Z may be any corrective pattern except double or triple. However Wave Z cannot be a Zigzag if Y is a Zigzag.
Wave Z is greater than or equal to XX by price.
Wave Z must be no more than 5 times either Waves XX, Y, X or W in price and time.
Back to back and double failures are not allowed.
If Wave Y is greater than Wave W by price, then the maximum Wave Z price movement is twice the price movement of Wave W.
Double and Triple Sideways Guidelines:
The largest Wave in Wave W is usually less than 140% of Wave W by price.
Wave X is usually a Zigzag family pattern.
The largest Wave in Wave X is usually less than Wave W by price.
Wave X is usually less than 140% of W by price.
Wave X is usually greater than 95% of Wave W by price.
The most likely retracement for Wave X is 110% of Wave W.
Time for X is generally between 62% of W1 and 1.618 of the time of W1.
If Wave Y is a Triangle, the most likely length of Wave Y is about 61.8% of Wave W. If Wave Y is not a Triangle, the most likely lengths for Wave Y are 100% of Wave W, 161.8% of Wave W and 10% of the length of Wave W beyond the end of Wave W.
The largest Wave in Wave Y is usually less than 140% of Wave W by price.
Wave Y is usually less than twice the longest of Wave W and Wave X in price.
Wave Y is generally between 61.8% of Wave W and 161.8% of Wave W in time.
Wave XX is usually a Zigzag family pattern.
The largest Wave in Wave XX is usually less than Wave Y in price.
Wave XX is usually less than 140% of Wave Y by price.
Wave XX is usually greater than 95% of Y by price.
The most likely retracement for Wave XX is 110% of Wave Y.
If Wave Y is a Triangle, most likely length by price is 61.8% of Wave W. If Wave Y is not a Triangle, then the most likely lengths are 100% of Wave W, 161.8% of Wave W and 10% of length of Wave W beyond the end of Wave W, all by price.
The largest wave in Wave Z is usually less than 140% of Wave Y by price.
Wave Z is usually less than twice the longest of Wave Y and Wave XX.

Originally Posted by amarnath

It looks better if you put this stuff in single txt file or as a pdf Also i dont know how much Mr.Elliott made himself using his EW techniques for me it never worked bcoz i dont know how to count waves

Originally Posted by amarnath

It looks better if you put this stuff in single txt file or as a pdf Also i dont know how much Mr.Elliott made himself using his EW techniques for me it never worked bcoz i dont know how to count waves

Originally Posted by CreditViolet

I have a pretty huge mindmap prepared using mindjet for EW, EW is a gud theory to learn but nothing money making there. I will go on to say that EW is a major hindrance to making money and stress-free trading.
Mr.Elliott didnt trade using his forecasts, he just used to publish them for others, not very different from what people do these days.

Originally Posted by CreditViolet

I have a pretty huge mindmap prepared using mindjet for EW, EW is a gud theory to learn but nothing money making there. I will go on to say that EW is a major hindrance to making money and stress-free trading.
Mr.Elliott didnt trade using his forecasts, he just used to publish them for others, not very different from what people do these days.