ctions of lesser degree.A five wave sequence is followed by a correction to the entire sequence.The correction to the entire sequence should exceed in price and time thecorrective waves two and four within the five wave sequence.If it appears an ABC correction has developed but it is less in price andtime than the waves two and four of the five wave sequence, more thanlikely it is not a complete ABC correction, but probably waves 1-2-3 ofwave A or a completed three-wave, wave-A, Whichever the case may be,the most important information is that if is probably not the completion tothe correction to the previous five wave sequence.The Wave-c low is probably not the completion of anABC correction to the five wave advance.It is too short in time and price.
The ABC correction shown above is probably not the completion ofthe correction to the five wave advance. If what appears to be an ABCcorrection is less than the price and time of waves two or four, it isprobably not the completion of a correction.Trading ImplicationDon't consider entering against a three wave correction unless it hasoverbalanced in price and Lime the prior waves two and four.
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Five wave sequences are always in the direction of the larger degreetrend.If a five wave sequence unfolds against the direction of the counter-Trend,it is an initial indication that the counter-trend has terminated.In the chart below, the minor five wave advance from £ signals thecorrection should be complete and the larger degree bull trend shouldcontinue. If the rally from c. was an ongoing part of a complex correction,it should only be a three-wave structure.Five- wave structures are always in the direction of the larger degreetrend.
Trading ImplicationThe five wave sequence from c suggests that the ABC correction shouldbe complete and a new impulse sequence of larger degree is probablybeginning. This marker should continue higher without exceeding theWave-c low. Prepare to enter on the correction to the initial, minor fivewave sequence from c.
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Pattern and Practical Elliott Wave Analysis
Principle of AlternationWave four usually alternates corrective patterns with wave two, Ifwave two is an ABC correction, wave four will probably be a complexcorrection. If wave two is a complex correction, wave four will probablybe an ABC correction. Wave two is usually an ABC correction.
Wave 4 b probably not complete at c:4,Since Wave 2 was a simple ABC, Wave 4 will usually be B "complex"correction, not a simple ABC
In the chart above, wave two was an ABC correction. Wave four willprobably not be an ABC correction but some form of complex correction.It is unlikely the abc decline from the wave three high has completed awave four correction.Trading ImplicationYou usually do not want to enter at the end of wave C of wave four ifwave two was an ABC correction unless time and price factors stronglysuggest wave four is complete. The odds are high that wave C of four isnot the end of the correction.
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Corrective Waves 2 and 4Main Characteristics and Price Ratio Projection?In projecting price targets for a correction, we must go under theassumption that the market has completed a five wave impulse patternof one degree or another. Corrections are always against the trend of theprevious five wave structure.We always go under the assumption that the connection will be aminimum of an ABC. An ABC correction will not necessarily be a simple,ABC zigzag, but may be an ABC irregular or flat. The B wave mightexceed the beginning of the A wave (end of wave five) and the C wavemight not exceed the end of the A wave.Usually, a completed corrective structure that is less than a 38,2%retracement of the prior five wave sequence indicates a strong marketthat should result in a strong impulse wave once the correction iscomplete. Replace weak for strong for a beat market.
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Pattern and Practical Elliott Wave Analysis
Corrective Wave TwoWave two is the fust correction within a new five-wave pattern. Wavetwo has the same characteristics of a B wave. Both wave-two and wave-Bcollections should be followed by a five wave structure in the direction ofthe previous trend which will be either a wave-C or wave-three.1. Wave twos tend to be "simple" ABC corrections, usually 5-3-5 zigzagswhere the C wave exceeds the extreme of the wave A.2. Wave two cannot exceed the beginning of wave one.3. Wave two will usually retrace over 50% of wave one. Therefore, wewould rarely look for a completed wave two pattern or to enter amarket until the suspected wave two has retraced at least 50% of thesuspected wave one.4. Wave two usually does not exceed a 78.6% retracement of wave one.5. If wave two retraces less than 50% of wave one, wave three willusually be the extended, impulse wave of the five wave pattern. Thisis even more likely to be the case if wave two is a flat or irregularpattern.
Wave 2 is usually a simple ABC zigzag and usually terminates betweenthe 50% and 78.6% retracement of Wave 1. A Wave 2 may not exceedthe beginning of Wave 1.
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Key Trading Strategies For Wave TwoThe ideal objective is to enter at or near the completion of wave two to bepositioned in the early stages of wave three which should be the strongestand longest impulse wave.Since a Wave-2 usually; retraces at least 50% of Wave-1, don'tconsider entering prior to the suspected Wave-2 reaching the 50%retracement. Since a Wave-2 usually does not exceed a 78.6%retracement, don't considering entering if the market has exceeded a78.6% retracement. If the market has either failed to reach a 50%retracement or has exceeded the 78.6% retracement (but not the beginningof Wave-1), wait to enter the market after the break-away from the Wave1 extreme.If waves A and B are identified, all efforts should be made to identifythe completion of wave C. Ideally, the sub-waves of C will be able to beidentified to project the end of wave five of C. Entering at or near thecompletion of wave two places the trader in the petition to take advantageof the next trend-wave whether it turns out to be a wave-three or a wave-
Wave-2 failed to reach the 50% retracement.Enter on the break-away from the Wave-1 extreme.
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Pattern and Practical Elliott Wave Analysis
Corrective Wave FourWave four is often called the "profit taking" correction. During wave four,many of the traders and investors who have been long through all or mostof the waves one through three will take profits. Wave four is often aprolonged correction, usually longer in time than the wave two.1. Wave four should not trade into the price range of wave one. If asuspected wave four trades into the price range of wave one, thelabeling is probably incorrect and the position of the market must bereconsidered.2. Principle of Alternation: If wave two was a simple correction (ABC)then wave four will usually be a complex correction- This is atendency, not a rule. Wave four is frequently a relatively flat,"complex" correction.3. If the wave four correction is one of the many "complex", flatcorrections (otherwise known as consolidation or trading range),it usually does not retrace more than 38,2% of waves 1-3.4. Wave four usually retraces at least 23.6% of wave three but usuallydoes not retrace more than 50% of wave three. This provides us withtypical minimum and maximum targets for wave four.5. The wave four retracement of wave three will almost always be asmaller percentage than the wave two retracement of wave one,6. Wave four is often near equality in price to wave two (W.4 = 100%W.2). If not, wave four will usually be at or near 62% or 162% ofwave two.
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Wave 4 usually retraces 23.6%-50% of Wave 3 but should not trade intothe range of Wave 1.Wave 2 is usually a simple ABC. Wave 4 is usually a complex correction.
If the suspected wave four trades into the range of wave one, the wavecount must be reconsidered. Keep in mind that the wave count representsthe position of the market and the most likely trend direction. If the wavecount must be reconsidered, the position of the market is in question. Ifthe wave four has traded into the price range of wave one, what may havebeen considered a new bull trend and the beginning of a five waveadvance may now be considered a correction to be followed by a continuation of a bear trend.This is one of the many ways that Elliott wave pattern analysisprovides a "pattern" stop loss to the market position.If wave two was an ABC correction, the odds are that wave fourwill be a complex correction. Knowing this, traders and investors shouldnot be too quick to want to enter long positions on a suspected wave fourKey Trading Strategy For Wave FourEnter at or near the completion of wave four to position for the wave fivetrend sequence.Because wave four is frequently a complex correction which is verydifficult to project in advance the ultimate outcome, the wave four patternis often of little use to identify the end of wave four. Identifying the endof wave four is more reliant on time and price projections if wave four isa complex correction.
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Pattern and Practical Elliott Wave Analysis
Waves A, B and CWave A1. Wave A is usually a five wave structure, but may be a three wavestructure. Wave A is an impulsive wave as it is in the direction ofthe larger degree trend. In this case, the larger degree trend is thecorrective trend direction.2- Wave A is similar to wave one. Wave A and wave one are the initialwaves of a sequence, price projections are pretty much limited toretracements of the prior impulse swing and projections of the minorinternal waves of lesser degree within the A Wave.
Wave B1. B waves arc counter-trend waves to the larger degree trend which isalso a counter-trend. In other words, a B wave is a correction to thecorrection. B waves are frequently three wave, ABCs, but may be anyof the numerous "complex" corrections.2. Wave B verses Wave A: B waves usually terminate in the 50% - 78.6%retracement zone of the A wave. However, a B wave will retrace over100% of the A wave in an irregular ABC correction.
Wave CC waves should always be five wave structures, C waves may or may notexceed the end of wave A. If wave B has not exceeded the beginning ofwave A, wave C will normally test or exceed the wave A extreme.1, Wave C verses Wave A. The price range of Wave C will usually beeither 62%, 100% or 162% of the wave A price range. If the correctionis a simple ABC, zigzag, wave C is usually 100% of wave A.2, Wave C verses Wave B: The price range of Wave C will frequently be162%, 200% or 262% of the wave B price range.3, Wave C should be a five wave structure: Use the price projectiontargets described for five wave impulse patterns to project the termination of the fifth wave within the C wave.
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Beyond ABC CorrectionsIf a market continues beyond an ABC correction, the counter-trend is nolonger as predictable in pattern. It is at this point that the Dynamic Timeand Price projections become important, as the time of the termination of[he correction will usually be within one of the Dynamic Time Projectionsand at one of the Dynamic Price ProjectionsFive Wave CorrectionsWait a minute! We've just spent a considerable amount of time and spacedescribing corrections as three wave structures and impulse trends as fivewave structures. What's this about five wave corrections?A market may unfold in any possible pattern. The impulse and ABCcorrective patterns that have just been described are the most frequenttrend and counter-trend patterns that are usually identifiable in the initialstages of the sequence. More importantly, the termination of [he entiresequence is very predictable once the sequence is identified within theparameters of the rules and guidelines. Recall that these patterns will beeasily identifiable only about 50% of the time. Other times, trends andcounter-trends may unfold in any of a multitude of patterns,Any five wave sequence that does not follow the rules and guidelinesof an impulse sequence is probably a correction or part of a correctionwith the exception of a fifth-wave-diagonal. One example of a corrective,five-wave sequence is an ABCDE correction which usually looks like acontracting triangle correction. There are others.Once the corrective wave structure has demonstrated it is going toextend beyond one of the ABC structures, do not take any labelingscheme too seriously. Always keep in mind that your objective is toextract the information from the market that will lead to high probabilitytrading and investing decisions. Never feel you must always be able tolabel a market "correctly."I have purposely not provided any illustrations of the many so-calledElliott-wave, complex-corrections. By illustrating them, it would implythat they arc legitimate, predictable patterns that provide reliable analyticalinformation to the analyst. They do not. There is no lack of other Elliottwave source material that will describe the myriad examples of complexcorrections in an attempt to convince the analyst that all markets may belabeled with an Elliott wave pattern, all of the time. It is time to dispel thismis-leading and expensive myth and only concern ourselves with highprobability, relevant information that helps to formulate reliable tradingand investing decisions.
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Pattern and Practical Elliott Wave Analysis
Parallel ChannelsParallel channels were suggested by Elliott to help identify where wavefour and five would complete. They have proven over the course of yearsand many markets to be very valuable. Consider them as importantconfirmations to the time, price and pattern position.
Projecting Wave 4Draw a trendline from the top of W.l to the top of W.3.Draw a parallel trendline from W.2.W.4 will often terminate at or very near the parallel channel line fromW.2.
Projecting Wave 5Draw a tread line from the bottom of W.2 to the bottom of W.4.Draw a parallel channel line from the top of W.3.W.5 will often terminate at or very near the parallel channel line drawnfromW.3.
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And Now For Another OpinionWhile Elliott wave analysis is relatively objective with specific rules andguidelines, pattern analysis does require the thought, knowledge and judgment of the trader. Much more so than time and price analysis, Anyanalyst who has studied wave patterns on charts for a length of timeknows that it ain't over till it's over, I don't care how ideal the patternlooks. Wave five can extend just when you thought it was all over. Thatideal ABC correction cart all of a sudden go haywire and twist and turn fordays, weeks, even months.When we begin to expect a market to continually unfold in an idealElliott wave pattern is when we have lost track of the practical value ofElliott wave analysis. The purpose of Elliott wave analysis is not toidentify and label every twist and turn in any particular market, all of thetime.
Elliott Wave Analysis ObjectiveThe objective of Elliott wave analysis for traders and investorsis to identify specific set-ups based on pattern that have a highprobability outcome and a specific market activity that willinvalidate the anticipated outcome!
If you demand more of Elliott wave analysis than this, take out yourcheckbook and keep it out. You will have a very costly experience!This chapter has described the market patterns that are the mostconsistently reliable in identifying me position of the market and the mostprobable outcome from the current position. I have also described what arethe most consistently reliable price relations between the various wavesthat allow us to project the price zones with the greatest probability ofsupport and resistance and pattern termination.How often will we be able to place the position of the market withinthe context of Elliott wave patterns as has been described here? About50% of the time!The major failure of analysts who primarily rely on Elliott wave tomake trading recommendations or forecasts is their attempt to put allmarket activity, in all markets, all of the time wilhin the context of Elliotswave patterns. When this is attempted, the wave counts frequently becomean outrageous exercise in hallucinogenic imagination with X waves allover the place, waves related to each other that are no way in anysymmetrical relationship within the pattern and, generally, forced wavecounts that don't relate to the concepts of Elliott's Wave Principle by any
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stretch of the imagination. Successful traders are rarely guilty of theseimaginary, forced counts, as they do not lead to profitable tradingdecisions. They only feed the ego of the analyst. Traders and investorsmust deal with the reality of market activity, not dreams and illusions.The trader who wishes to incorporate Elliott wave pattern analysisinto his or her trading plan must recognize and admit to him or herselfwhen the market pattern does not fit into one of the relatively simpleimpulse or corrective patterns. When this is the case and the time andprice analysis does not provide sufficient information to make a tradingdecision, that market must be ignored as a tradable market until theposition does become clear!Don't Become An Elliott Wave ObsessiveRecall that at the beginning of this chapter. I stated that one of the mostimportant objectives of Elliott Wave analysis is to distinguish if [hemarket was in a trend or counter-trend position. I also stated above that aclearly identifiable Elliott Wave pattern is usually only evident about 50%of the time in most markets. When a market is not unfolding in one of thespecific impulse or counter-trend patterns described in this chapter, therules, guidelines and general characteristics of impulse and counter-trendpatterns will often strongly suggest whether the market is in an impulse orcounter-trend position. That is a valuable piece of information itself.Do not become obsessive with having to make a specific wave count ifone is not obvious. The road to trading and investing ruin is littered withElliott-Wave-Obsessives who would leave no chart unlabeled. The harderyou have to work to apply a wave count the less likely it is to be a validcount and the more likely you will believe it to be a true when in fact it isonly an illusion of your label-obsessive mind.In recent years, software programs have been developed withextensive and complex algorithms mathematical rules) that supposedlyprovide Elliott wave labels automatically on any data chart. If a softwareprogram provides an Elliott wave count on each and every data file, theprogram (and its programmer) assumes there is a valid and practical Elliottwave count on every data series, ar any time. The program is forced toprovide a wave count, even when none logically exists, A forced wavecount is not only misleading, but will prove very costly to the trader whofoolishly takes action on this irrelevant information.Beware of forced wave counts, whether they are made by you, anElliott wave analyst or a software program,
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And Now For the Real Elliott Wave StoryThe beauty and significance of R. N. Elliott's work is chat he recognizedthat markets are composed of groups of people that respond as crowd behavior in the same way that other social groups respond to a cycle ofevents- There is a process that evolves in almost every cycle of crowdbehavior that runs its course. This process results in a fairly predictablepattern of behavior of cycles of optimism and pessimism. This processand pattern of behavior is represented on price charts of financial markets,as the price charts are simply reflections of the state of the psychology ofthe group participating in the market.Throughout the course of R. N, Elliott's work developing his WavePrinciple, it is obvious he continually looked to refine and expand uponthe guidelines of his wave principle as applied to the markets. In Elliott'searlier work, there were no X waves, there were no "rules" and there wasno mention of Fibonacci numbers or ratios!Elliott developed his theory over less than a ten year period from thelate 1920's to the latter half of the 1930's. It was in 1938 that Elliott'sfirst monograph, The Wave Principle, was published by Charles Collinsand the following year that Elliott was commissioned to write a series ofarticles on the principle for Financial World magazine.It is these early works of Elliott that I find the most valuable. Here isfound the spirit of the fundamental truths of what Elliott discovered aboutpattern and process in the cyclic development of the financial markets, unencumbered with the need to explain every little twist and turn on thefinancial charts. There were no X waves, no complex corrections, justfives and threes. Occasionally, a fourth wave traded into the territory ofwave one. Occasionally, a third wave was the shortest impulse wave.The form was more important than any rules. The process would notbe denied.From 1938 - 1946 Elliott published his educational and forecast letters(R.N. Elliott's Market Letters, edited by Robert R. Prechter, Jr.). In theseletters it became evident that Elliott felt he must show his theory to beright under all conditions, at all times. In these letters we find that hemade his theory fit whatever market activity unfolded. There are somepretty wild counts in these letters. Here we are introduced to the dreadedX wave (actually a # wave) which mysteriously shows up whenever amarket correction does not comply with a three (ABC) or five (ABCDE),No correction will be denied its count!It is also during this lime that Elliott begins to expound on theFibonacci number series, Elliott's knowledge of Fibonacci number andratio is elementary at best. While he demonstrated some of the Fib counts
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Pattern and Practical Elliott Wave Analysis
and ratios relating to some market activity of time and price, this aspect ofmarket activity was obviously not well thought out or researched byElliott. After what can only be considered a brief study of number, ratioand geometry, Elliott was amazed and thrilled that he had discovered the''secrets of the universe" and the great "laws of nature", all convenientlyavailable on the shelves of his local bookstore, courtesy of Jay Hambridge,Samuel Coleman, Manly P. Hall and others. (A little irreverence is due allgreat men in order to maintain perspective and avoid idolatry,)What is the point of this brief history of R. N. Elliott? The practicalapplication of Elliott's Wave Principle to trading and investing decisionshas its strengths and weaknesses. Elliott did not describe a "law of themarkets" with inviolate rules. With a limited history of data and within afairly short period of time, Elliott recognized an important process thatdeveloped in the cycles of market activity. He recognized that the form ofthis process was fairly regular, which allowed for a certain degree ofpredictability of future behavior. He recognized that markets have a fairly,consistent symmetry of ratio based on the Golden Mean (1.618). He suspected (rightfully so) that mis was the same process and same proportionsthat are evident in almost all natural growth processes outside crowdbehavior.When Elliott died in 1948, the understanding and application of hisprinciple of form and ratio in the financial markets was really only in itsinfancy. Since the time of his death, far more has been written aboutElliott and his Wave Principle than Elliott wrote himself. Market analystsover the years have had the opportunity to study thousands of charts ofmany more markets than did Elliott. The great value of his principle hasbeen demonstrated time and again, as well as the frequent weaknesses.Knowledge is never static. There is never the final word on anything.Today, we find that Einstein's Theory of Relativity may not be theinviolate law it has been accepted to be for most of the century. How canwe say that Elliott's Wave Principle may also not be as complete andinviolate as some would like us to think?In light of the above discussion, here are a few comments andsuggestions thai will help the analyst, trader and investor to apply Elliott'sWave Principle in a practical manner.Elliott Wave "Rules"There are none, according to Elliott in The Wave Principle monograph.The three "inviolate" rules of labeling wave patterns were developed afterhis death in order to make his principle and its application more accept-
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able to the left brain junkies who believe life unfolds with predictable,mathematical precision.Why then have I described and illustrated these rules throughout thischapter? They ate usually not violated in real-time market activity. Theyprovide an objective guide to understand market position and to makeobjective decisions. Implement the rules in your wave counts.Occasionally, you will be betrayed by the truth of the market whichdoes not always follow the rules, but more times than not the "rules" willkeep your view of the market in proper perspective.Experience will provide the knowledge and intuition when to breakthe rules. But don't be too quick to do so.If you are going to violate the three so-called "inviolate rules" ofElliott wave analysis, be consistent regarding those violations. Forinstance, let's take the rule that a wave four of a five wave impulsesequence may not trade into the price range of wave one. I only considerthat rule violated if the suspected wave four closes within the closingextreme of wave one, not trades into the intraday range. I know of othertraders who have thoroughly studied markets and only consider a tradegreater than 10% into the wave one range of many markets as a violationof the wave four-wave one overlap rule.So-called Elliott wave purists, or, as I call them, traditional Elliottwave analysts, would say that expanding the parameters of this rale ineither of the above ways is not trading R. N. Elliott's Wave Principle.I'll let you decide what you want to call it. The Elliott wave purists aremostly academic advisors who do not apply the principle successfully totheir own trading or investing and have generally been creamed in thestock market in the last few years calling the top of the market morefrequently than the full moon cycle.Elliott provided a firm and original foundation for pattern analysis inthe markets. Don't hesitate to expand on Elliott's work when your marketresearch proves it necessary and profitable.Trend or Counter Trend?The most important piece of knowledge a trader can have is a confidentidea of trend direction- Elliott's work is very helpful in this regard, asElliott wave patterns each relate to trend or counter-trend. Trends unfoldin five waves. Counter-trends usually unfold in three waves or a series ofthree waves.
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Pattern and Practical Elliott Wave Analysis
Market PositionElliott wave patterns will frequently provide a clear indication of theposition of the market within the trend or counter-trend and what activityshould follow to complete the trend or counter-trend pattern. Having aconfident idea of trend direction, the position of the market within thetrend and the likely activity that should unfold prior to the terminationof the current trend signals to the trader which side of the market to trade,short or long. There can be no more valuable information.Alternate CountsA very important factor of Elliott wave analysis is that it usually providesfor an obvious "alternate count" if the market invalidates the ''preferredcount" or the first assumption of the position of the market. If a marketdoes not unfold as anticipated because it violates one of the rules or guidelines associated with its current position, the trader may then have a firmconviction of what the new position of the market is which will allow himor her to take an alternate trading or investing action.Do not abuse alternate counts. When a market does not unfold asanticipated by the Elliott wave analysis and there is no reliable alternatecount that fits within a reliable wave structure, the trader must then admitthat the position of the market is not clear and avoid forcing a count justfor the sake of having a count. There will be many times when a marketshould be avoided because the pattern of the market docs not fit within areliable structure.Cash Stock Indexes versus Other MarketsAlmost all of Elliott's research and analysis was done on the cash stockindexes, primarily the DJIA. The Wave Principle is a reflection of massor social psychology. It is best reflected by a large group of people from awide variety of backgrounds with a single interest. Of all the financial orfutures markets, this is best reflected in the stock market, and it is in thestock market indexes that we find the Wave Principle most applicable on aconsistent basis over the greatest variety of time periods,Long Term versus Short TermFortunately for traders, the Wave Principle and its catalogue of patternsare most consistently evident in short to intermediate term degrees, a fewdays to a few months. This is particularly true of commodity markets. Ifyou have ever seen an attempted wave count of a 20-30 year or longer
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Dynamic Trading - Chapter 3
monthly chart of soybeans for instance, you have probably seen a greatlesson in futility and imagination!Yet, the individual bull and bear trends that typically last one to threeyears in agricultural markets usually unfold in the basic fives and threes,trend and counter-trend even in the panic, weather markets. The intermediate term trends often unfold in text book Elliott wave pattern and priceprojections! Just don't try to explain how the five-wave, two year bulltrend fits into the fifty year cycle from an Elliott wave perspective. Itdoesn't.Cash versus FuturesIdeally, all wave counts should be done on cash prices to avoid the distortions thai are inevitable in continuous futures prices. Today's price of afutures contract includes adjustments due to carrying charges, interestcharges, etc. No future's contract price represents today's idea of valueexcept on expiration day. Cash charts are much less likely to violate the"rules" than futures charts.Other than individual stock and stock index analysis, most wavecounts are done on futures contract data including long term, continuousdata because this data is much more available from data services than longterm cash data. Ideally, the analyst will double check his or her work oncash data to see if the form and pattern are the same as the continuousfutures data.Closing Price versus Daily Price RangeWhile most of our work is done using the time and price of swingextremes of the daily range of data, daily closing prices should be carefully considered for wave counts. This will become evident when therules come into play. If there is no other evidence related to pattern tocontradict a five wave impulse count other than Wave-4 trade during theday into the range of Wave-1, check closing prices and only consider thecount to be invalidated if Wave-4 makes a daily close within the closingrange of Wave-1.Objective versus SubjectiveBecause Elliott's Wave Principle and its application is not 100% objectivelike time and price projections, it has been derided by many as useless andlittle more than guess-work. This is particularly the tack token by systemjunkies and system promoters who live under the illusion that marketactivity and a successful business of trading or investing may be reduced
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to a mathematical algorithm that will provide them with keys to profitswith no strain on the brain.Elliott's Wave Principle and its catalogue of patterns and guidelinesprovide an objective method to recognize the position of a market most ofthe time; be prepared for the most probable outcome of the current marketposition on a consistent basis, and; provide for the specific market activitythat will invalidate the current opinion. The Wave Principle requiresstudy, thought, knowledge and, yes, even occasionally, judgment- Everysuccessful business requires this. If you are under the illusion that you cansucceed in the business of trading or investing without knowledge and theoccasional application of judgment based on that knowledge, youprobably don't remember the 60's! And, probably don't care and shouldget a job and a haircut.When the market is not unfolding in a clearly recognizable patternwithin the content of the Elliott Wave Principle, do not force a wave countjust for the sake of having a wave count. Trading and investing will onlybe successful when you recognise that action is only taken when themarket is in a position that places the probabilities clearly on your side.There is no place for guesswork or ambiguity. Only your own, personalpatience and discipline will provide for success.
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Elliott Wave Chart ExamplesThe following pages show numerous Elliott wave examples from manymarkets. Most arc examples that were shown and described in myDynamic Trader Analysis Report newsletter.The purpose here is to get you So recognize patterns that provide ahigh probability opinion of the position of the market and the marketevents that will validate or invalidate the