The Elliott Wave Principle is a form of price based behavioural analysis used to understand current and future price behaviour and movements by observing and identifying repetitive wave patterns of varying fractal degrees. An Elliott wave typically consists of a five-wave advance followed by a three-wave decline. To visualize this, think of a stylized graph with waves labeled as follows: the first three waves (1, 2, and 3) move up, where wave 2 is a correction of wave 1, and wave 3 is usually the longest and most powerful. Wave 4 is a correction of wave 3, and wave 5 is the final move up. After these, there are three corrective waves (A, B, and C) that typically move downward, with wave B being a minor upward correction within the overall decline.
Below is our comprehensive pattern analysis template based on Elliott wave counts.
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