Elliott Wave Pattern represents the structure of a wave with Definite rules and Fibonacci Calculations of internal waves. Every wave of Elliott Wave Theory has its own definite patterns which help us to identify if a waves is completed or not. It shows the position of price within the wave.
Elliott Wave Theory is nothing without Elliott Wave Patterns. Elliott wave cycle consists of 8 waves but every wave has its own Elliott Wave Pattern. We must have picture of every pattern in our mind to identify waves accurately and to confirm if waves you are marking are correct or not.
It also gives an idea about general trend and indicates where a particular wave is going to complete. It gives the idea of trend reversal and same is explained in earlier chapter
There are 3 types of Elliott Wave Theory patterns which further subdivided into 7 main Elliott Wave Patterns. 3 types of patterns are: –
Impulse is an independent patterns and is consist of five lower degree waves marked as 12345 or i,ii,iii,iv,v or any other number format.
It is a basic pattern of Elliott Wave Theory or we can say that Impulse is base of Elliott Wave Theory. The Impulsive wave in Elliott Wave Cycle is identified as an Impulse which includes all other patterns.
Impulse waves are in the direction of main trend and generally faster and larger than corrective waves.
Diagonal Triangles are complex patterns of Elliott Wave Theory and is the part of main proceeding trend like Impulse.
Diagonal Triangles are consists of five inners waves but its inner wave 4 overlaps inner wave 2 and it forms a Triangle or Wedge pattern. That’s why it is called as Diagonal Triangle.
There are 02 Diagonal Triangle Patterns
Rules and calculations of both these diagonal triangle patterns are exactly same but their inner wave structure is different.
Corrective Wave Patterns forms opposite to the main trend. There is corrective wave after every Impulse in Elliott Wave Theory and every corrective waves has Corrective Pattern.
There are 4 main Corrective Patterns
Simple Zigzag, Irregular and Flat Correction are independent pattern whereas Complex Correction is repeated combination of these independent patterns.
There are total 7 number of main Elliott Wave Theory Patterns
These are 7 major pattern and same can be divided into many sub patterns if we dig deeper. But all other sub patterns are derived from these main 7 patterns.
Every wave in Elliott Wave Theory Cycle has its own pattern, so let me explain which wave can have what pattern.
Wave (1) can have two patterns
Wave (2), (4) and (B) can have Four Patterns.
Wave (3) and (C) can have only One pattern.
Wave (5) can have two patterns.
I just mentioned 7 main Elliott Wave pattern because it is not possible to explain every single possibility in this article.
Otherwise one single pattern can be divided into many many sub patterns based on its inner wave composition and its Elliott Wave Personality.
There can be any number of sub patterns in Elliott Wave Theory, but all the sub patterns can be identified and understood if you understand the structure, rules and Fibonacci calculations of these main 7 wave patterns.
About Deepak Kumar
An independent Elliott Wave Theory analyst, trainer and trader. Analyzing Indian Indices and stocks since 2011. Founder of “Sweeglu Elliott Waves” and author of most practical book on Elliott Wave Theory, “Practical Application of Elliott Wave Principle”
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