After studying this chapter, the practitioner and student should be able to:
Elliott wave analysis is widely used by institutional traders and analysts. The wave principle provides traders and analysts with a unique way of understanding market action, forecasting potential breakouts and significant reversals. This chapter covers all the basics of Elliott wave analysis with various chart examples.
The reader is strongly advised to refer to the original writings of Ralph Nelson Elliott for comprehensive and concise description of Elliott wave analysis. The references are located at the end of this chapter. Readers are advised to refer to Elliott Wave Principle by Frost and Prechter, which in the author's opinion, represents the leading authority in the study and advancement of Elliott wave analysis.
The basic construct of Elliott waves consists of a 5-3 wave formation. This simply ...