Intro to Elliott Wave Article in SFO
This month’s SFO (Stocks, Futures, Options) Magazine has an excellent introductory article on Elliott Wave Theory entitled, “Roadmap or GPS – Lessons in Elliott Wave Analysis” by Jim Martens of Elliott Wave International.
Martens compares Elliott Wave analysis to navigating a car during a drive – do you use the flashy GPS device or do you stick with more tried and true methods, such as using a standard roadmap? Is there a difference? If so, how does it apply to the markets?
Martens encourages us to “Embrace the Zig-Zags” (and detours) as well as provides a quick “Road Map” of Elliott Analysis. He describes the standard five-wave impluse and the three-part corrective phase, as well as describes the inherently fractal nature of Elliott analysis. Further, he describes a little about the ‘controversial’ technique of using alternate counts, when to do so, and why to use them.
He also describes Elliott interpretation as being partially about finding the count that meets the most guidelines while not violating any of the three major Elliott Rules.
A refresher:
1. Wave 2 cannot retrace 100% of Wave 1
2. Wave 3 cannot be the shortest wave
3. Wave 4 cannot enter the price territory of Wave 1
Check out the article and more from SFO!
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