Elliott Wave Analysis
A critical level for t Much like sea shells and snow flakes, Elliott waves could be further subdivided into smaller Elliot waves.
The main reason behind that modification is that the recent weakness from 1. The euro moved toward the upside, so far in 3 waves. The pattern looks rather clear on the daily chart, but the noise on the hourly chart is so excessive that two counts are necessary.
As expected the euro moved toward the downside, passed the confirmation point, and is now well on its way toward our targets. Cable remains locked close to its lows and no evidence yet to support the idea that the downtrend has resumed. We want to see an impulsive decline below the most recent swing lows to gain confidence in the main hourly count. As expected the euro moved toward the downside, reached both targets, and exceeded the second target by 7 pips.
This part of the decline is now complete, but the decline as a whole looks like it needs one more dip lower. We continue to look for signs to support the idea that the downtrend has resumed. Even though the decline is more in line with the main hourly count, the decline is — so far — in a three-wave pattern. Although the variability of forms represents a real challenge for any Elliott's apprentice, it is important to distinguish between an impulsive and corrective wave.
And here lies another big lesson from Elliott: In the midst of a corrective pattern, it is common that patience is exhausted while waiting for confirmation of a trend change. So we must give corrective patterns the time to unfold before wading into the market.
This requires discipline and a solid understanding of the variety of ways in which corrective patterns can be deployed. Well, today is your lucky day the FXStreet team has been working on a research material to make you an expert.
The publication of R. Elliott's The Wave Principle in marked the beginning of the Elliott Wave Movement which has attracted a huge following in the technical analysis community. The expert Peter Goodburn talks about Elliot Wave pattterns. It is ingrained in most of our belief systems that we are competing with the rest of the world. In some extreme cases we might even tend to see big market participants or even broker-dealers conspiring against the little traders.
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These waves not only impact the financial markets, but can be applied to social elements like Music, Art, Movies and more.