Elliott Wave Rules
The 3 main rules of Elliott Wave count
These are the only 3 unbreakable rules that can't be altered. The rest of the Rules, and there is a considerable number of them, can have alterations, substitutions etc, which again explains the fact that markets can't be totally predictable.
4. The Principle of Alteration
Waves 2 and 4 within an Impulsive wave will unfold in different forms: if wave 2 is a simple ABC form ( zigzag), the 4th wave is likely to be a complex wave (triangle, double three etc.)
Over years Elliott followers tried to collect the rules and improve the interpretation of the waves. As a result, today we can find hundreds of new Elliott wave rules and guidelines, which try to cover every aspect of the price behaviour.
Below is the most detailed Guidelines we've ever come across:
But is it possible to put every price move to the rules? Will such classification be worth studying, or will it simply be a description of every possibility in the market, which we don't need to read about to know that it exists? It's up to you to decide.
Just keep in mind that Elliott wave trading is not about being right and knowing the next move every single time. Elliotticians make mistakes and they make a lot of them, even most experienced professionals like Robert Prechter aren't correct every time*. What's important is that they are ability to accept being 100% wrong and re-do the analysis while accepting losses when necessary.
*Prechter's record at the end of the twentieth century has not been so perfect: his book "At The Crest Of The Tidal Wave" (1995), calling for the end of the great bull market in 1995, was nearly five years off the target.
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