Elliot Waves are fractals.
This means that each wave is made up of self-similar sub-waves that also have some relevance in the market. In other words, the same 1-2-3-4-5-a-b-c pattern that makes up the basic Elliott Wave can be seen in some form or fashion as you zoom in and zoom out.
As you adjust timeframes, the same pattern can be found — on the hourly, daily, weekly, or really any timeframe. You can see what that looks like here:
Each wave is made up of smaller fractal waves that help steer them wherever it is that they are going to go.
Pretty interesting right? The pattern will repeat itself throughout the market if you know where to look for it and what specifically you are looking for when you start to scope it out.
Here is a list of the types of waves you will find in Elliott Wave theory from largest to smallest:
- Grand Supercycle (multi-century)
- Supercycle (about 40–70 years)
- Cycle (one year to several years)
- Primary (a few months to a couple of years)
- Intermediate (weeks to months)
- Minor (weeks)
- Minute (days)
- Minuette (hours)
- Sub-Minuette (minutes)
To help you better understand what these waves look like on a chart, take a look at this:
No Perfect Shape
The waves that appear in real trading conditions are certainly not perfect in the way that they are shaped. They appear much choppier on a chart than they ever would in the theory of these waves. The important thing about this is that you realize that you are not going to see a perfect setup wave almost ever. It is possible that some charts will look cleaner than others, but you will rarely be able to spot the waves as easily in the real world as you would in a textbook.
Just keep that in mind when you are trading so you don’t get confused by all of the actions that you see throughout the market.
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