Elliot Wave Theory (continued)

Impulse waves

A variation known as an "extension" can be seen in parts of one impulse waves. Extension is a movement that exceed or longer movements and it is completely out of scale when compared with other impulse wave (in each Wave 1, wave 3 or wave 5). Most Extension occurs in wave 3. Extension may also occur in Extending wave itself.

Elliot Wave Theory

Fundamental Concept

The most popular pattern of Elliot Wave are :

Picture 1

1.    Main movement in Forex market surely will form pattern in five wave, then after formed a whole series wave there will be “correction” which is formed by three wave that move reversal. (See picture above)

2.    Amount from this phases called “cardinal waves” by Elliot, also knowing as “impulse wave”, this condition popularized again by Pretcher and Frost. The Phases that marked by alphabet known as “corrective waves” or in general called as “threes”.

3.    Wave 2 is the correction from wave 1 then wave 4 is the correction from wave 3. A whole series wave from 1 to 5 have correction a-b-c series.

4.    In macro illustration, series wave from wave 1 to wave 5 completed if peak from the wave that formed is more higher than before or alson known as “simply put”. This, series wave from wave to wave 5 is accomplished if wave 1, 3, 5 is formed, meanwhile a-b-c series completed if wave 2 and wave 4 is formed. (see picture 2)