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 set up wave almost ever. It is possible that some charts will look more clean 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 action that you see throughout the market.

 


Disclaimer: All information provided here is intended solely for study purposes related to trading financial markets and does not serve in any way as a specific investment recommendation, business recommendation, investment opportunity, analysis, or similar general recommendation regarding the trading of investment instruments. The content, in its entirety or parts, is the sole opinion of SurgeTrader and is intended for educational purposes only. The historical results and/or track record does not imply that the same progress is replicable and does not guarantee profits or future profitable trading records or any promises whatsoever. Trading in financial markets is a high-risk activity and it is advised not to risk more than one can afford to lose.