• 15 hours Italy’s Central Bank Embraces Sustainable Investing
  • 18 hours Trump Lifts Metals Tariffs To Cool Simmering Trade War
  • 21 hours Researchers Push To Limit Space Mining
  • 23 hours Could China Start Dumping U.S. Treasury Bonds?
  • 2 days Is Winter Coming For HBO?
  • 2 days Rise Of EVs Signals Peak Gasoline
  • 3 days Jeff Bezos Doubles Down On Space Colonization Ambitions
  • 3 days Gold Mining Stocks Stuck In Limbo
  • 4 days Executive Order Targets Huawei Over Espionage
  • 4 days Why Now May Be The Best Time Ever To Hold Gold
  • 5 days Fake News Sinks Shares In UK-Based Bank
  • 5 days De Beers To Build $468 Million Diamond Recovery Ship
  • 5 days Moody's: Turkey Faces Possible Credit Downgrade
  • 5 days Tesla's Solar Sales Are Slipping
  • 6 days Auto Industry To Get Temporary Tariff Relief
  • 6 days Welcome To The World’s Biggest Free Trade Area
  • 6 days Central Banks Are Stockpiling Gold At The Fastest Rate In Half A Decade
  • 6 days U.S.-China Impasse Threatens Rare Earth Trade
  • 7 days Wall Street Bears $1 Trillion Brunt Of Trade War
  • 7 days Mobile Sports Betting Isn’t Quite Minting Millionaires Just Yet
How Millennials Are Reshaping Real Estate

How Millennials Are Reshaping Real Estate

The real estate market is…

Strong U.S. Dollar Weighs On Blue Chip Earnings

Strong U.S. Dollar Weighs On Blue Chip Earnings

Earnings season is well underway,…

Market Sentiment At Its Lowest In 10 Months

Market Sentiment At Its Lowest In 10 Months

Stocks sold off last week…

Elliottwave-Forecast

Elliottwave-Forecast

Elliottwave-Forecast

Elliottwave-Forecast.com (by EME PROCESSING AND CONSULTING LLC) was founded in 2005 by Eric Morera. Since inception our company has provided tailored Financial Market Services to…

Contact Author

  1. Home
  2. Markets
  3. Other

Elliott Wave Personality and Characteristics

Besides technical characteristics, Elliott wave analysts are also familiar with individual wave personality, which typically reflects the psychology of the moment. In the picture below you can see an example of the rising trend - 5 wave impulsive structure.

Idealized Elliott Wave Impulse Pattern

  • Wave 1 is rarely obvious at its inception. Traders believe previous trend is still strongly in force and it's usually considered as correction. Volume might increase a bit as move progressing, but not by enough to alert many technical analysts. Occasionally it could take structure of leading diagonal.

  • Wave 2 corrects wave one and it could never extend beyond the start point of wave 1. In most cases it do not retrace more than 61.8 % or 76.4% of wave 1. It usually takes form of Zig Zag, Flat or Double Three and it could never be a Triangle. Volume should be lower during Wave 2 than during wave 1.

  • Wave 3 is usually the largest and most powerful wave in a trend. Price is progressing quickly, corrections are short -lived and shallow. By wave 3 midpoint the crowd will often join the new trend. Wave 3 must exceed at leas 1.618 fib extension of wave 1 and could go up to 2.618 fib ext or more. Wave 3 cannot be the shortest one.

  • Wave 4 is typically clearly corrective. Price could do sideways for an extended period and typically retraces less than 38.2 %, usually 23.6% of wave 3. Fourth waves are often frustrating because of their lack of progress in the larger trend. Wave 4 does not overlap with the price territory of wave 1, except in the case of a diagonal. It often takes structure of flat, triangle or irregular correction. At Elliottwave-Forecast.com, we don't label a wave 4 if it passes 50% Fibonacci retracement of wave 3 (unless a diagonal)

  • Wave 5 is the final leg in the direction of the dominant trend. The news is almost universally positive and everyone is bullish. Unfortunately, this is when many average investors finally buy in, right before the top. Volume is lower in wave five than in wave three, and many momentum indicators start to show divergences. It often takes form of ending diagonal structure.

 


If you would like to have an access of EWF analysis in real time, click here and feel free to join us. We provide Elliott Wave charts in 4 different time frames, 2 live webinars by our expert analysts every day, 24 hour chat room support, market overview, daily and weekly technical videos and much more.

 

Back to homepage

Leave a comment

Leave a comment