THE ELLIOTT WAVE PRINCIPLE 2
This chance to
forecast price moves motivates legions of analysts to work day and night. We
will focus on the ability to forecast, and try to answer whether or not it is
possible.
Elliott was very
specific when he introduced his concept. He said, "All human activities have
three distinctive features, pattern, time and ratio, all of which observe the
Fibonacci summation series" (Elliott, p. 48).
Once the waves
can be interpreted, the knowledge may be applied to any movement as the same
rules apply to the price of stocks, bonds, grains, cotton, and coffee. The most
important of the three factors is pattern. A pattern is always in progress,
forming over and over. Usually, but not invariably, you can visualize in advance
the type of pattern. Elliott describes this market cycle as, ". . . divided
primarily into 'Bull Market' and 'Bear Market'" (Elliott, p. 48). Figure 2-1
subdivides the bull market into five "major waves" and the bear market into
three major waves. The major waves 1, 3, and 5 of the bull market as subdivided
into five "intermediate waves" each. Then each of the intermediate waves 1, 3,
and 5 subdivides into five "minor waves." Forex 101.
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Forex Art Of Fibonacci (Forex 102)
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