Elliott wave theory explained with examples – wave’s cycle sweeglu elliott wave electricity and magnetism pdf


Basic Concept of Elliott Wave theory explained with examples – Wave’s Cycle, is a part of very first chapter of my book “ Practical Application of Elliott’s Wave Principles by Deepak Kumar”. Many of my followers and blog readers requested me to explain Elliott wave’s cycles in details so that they can understand better.

This chapter covers only basics of Elliott Wave Theory that you need keep in your mind before going forward. These are just simple wave’s rules but applicable in every pattern and in every conditions. I am not adding any real time chart in first chapter as it may confuse you in the start and tried to explain the basics of Elliott Wave Theory with imaginary graphs and figure to make you understand easily. Don’t try to think hard and compare these imaginary figures with real time chart but, just try to understand the concept. Elliott Wave Theory explained in later chapters with lots of examples on real time charts. So let’s start from simple end.

Elliott observed that every financial market, stocks or financial instrument moves in zigzag formation and called it wave’s cycles. And that zigzag formation consists of a set of 5 waves in the direction of Primary/Main/Bigger trend followed by a set of 3 waves opposite to direction of main trend.

Note: – If we see the history of market from start, the main/primary trend is always up as the market cannot go below zero. In this book, most of the examples I covered with uptrend (bullish trend) as main trend and down trend (bearish trend) as corrections. But the rules are applicable same on both bullish and bearish market.

You already learned about the wave’s cycles of EWT and now, it’s the time to know 3 basic rules applicable on waves. I am not explaining every rule and condition here in this topic but just stating three basic principles to remember that are the back bone of EWT. All the predictions, calculations of entry levels, stoploss and targets are based on these 3 primary rules only. These are: –

Though these three rules are not everything about Elliott Wave’s Theory but these three simple rules will help you a lot in identifying patterns, predicting levels and taking low risk entries in market for high profit. And I will explain everything in next chapters how to use these rules for profitable trading. For now, just remember these 3 rules.

This is the wave’s cycle that every financial Instrument including Stocks, Indexes, Commodities, and Currencies follows. Not only long term but every single move even a 5 minutes move have same wave’s cycle in its internal structure. It is a natural law, a path on which the stock market moves.

But this is just the start or you can say beginning or concept of Elliott wave theory I explained in this article. Though every financial instrument follows the same pattern but you will not see it clearly on real time charts as I shown in imaginary figures. Every wave of this Elliott’s Wave Cycle has separate personality, separate calculation and separate internal structure in different conditions.