Elliot Wave Theory

1. Elliot Wave Theory- A complete bull market cycle is made up of eight waves, five up waves followed by three down waves.
2. Elliot Wave Theory- A trend divides into five waves in the direction of the longer trend.
3. Elliot Wave Theory- Corrections always take place in three waves.
4. Elliot Wave Theory- Waves can be expanded into longer waves and subdivided into shorter waves.
5. Elliot Wave Theory- Sometimes one of the impulse waves extends. The other two should then be equal in time and magnitude.
6. Elliot Wave Theory- The Finobacci sequence is the mathematical basis of the Elliot Wave Theory.
7. Elliot Wave Theory- The number of waves follows the Finobacci sequence.
8. Elliot Wave Theory- Finobacci ratios and retracements are used to determine price objectives. The most common retracements are 62%, 50% and 38%.
9. Elliot Wave Theory- Bear markets should not fall below the bottom of the previous fourth wave.
10. Elliot Wave Theory- Wave 4 should not overlap wave 1. 

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