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Elliott Wave Theory and right rule about Wave 4. A clarification.


Minion

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I often read two different versions about this rule:

1. Wave 4 doesn't have to overlap the range territory of Wave 1

2. Wave 4 doesn't have to overlap the range territory of Wave 2

 

and these two versions doesn't mean the same thing, since if Wave 2 is an expanded flat its "range territory" goes well above the end of Wave 1.

If Wave 4 overlaps the final part of Wave B of an expanded flat is still the wave count correct?

 

So I am asking which one is the correct version of EWT rule about Wave 4 (I think #1)

Edited by Minion
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OK, thanks for the files, but why do they say that "Wave 4 cannot enter the price territory of Wave 2"?

 

Wouldn't it be more correct to say "Wave 4 cannot enter the price territory of Wave 1"?

If Wave 4 enters in the territory of a Wave B of of an expanded flat (=Wave 2) without entering into the price territory of Wave 1, is still the count correct?

 

For what it counts, Prechter (in the Elliott Wave book) talks about Wave 4 ... into the price territory of Wave 1 (and not 2)

And the Elliott Wave Crash Course that you posted talks about Wave 1, while the Elliott Wave Guidelines also posted talk about Wave 2

Why two different interpretations for one simple rule?

Edited by Minion
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  • 9 months later...
Minion, did you ever find an answer why there are two different views of the this rule?

 

The answer I found is that

 

this is the RULE

Wave 4 doesn't have to overlap the range territory of Wave 1

 

this is a STRONG GUIDELINE

Wave 4 doesn't have to overlap the range territory of Wave 2

 

The RULE must never be violated

The STRONG GUIDELINE should not be violated, meaning that one has to see if other counts are possible and prefer them, and consider the violation of the strong guideline only as a last resource. :)

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The answer I found is that

 

this is the RULE

Wave 4 doesn't have to overlap the range territory of Wave 1

 

this is a STRONG GUIDELINE

Wave 4 doesn't have to overlap the range territory of Wave 2

 

The RULE must never be violated

The STRONG GUIDELINE should not be violated, meaning that one has to see if other counts are possible and prefer them, and consider the violation of the strong guideline only as a last resource. :)

 

Hi ! There is the difference between Rules and Guidelines. Rules must not be violated but guidelines are there to just guide you about some of the repeating wave behavior that most often get repeated but not mandatory that wave structure will always follow the Guidelines.

 

There are three rules and they are must not be violated. One of them as u asked is "No Portion of Wave 4 should enter the price territory of either wave 1 or wave 2".

 

There are there guidelines - And they are just guide and not a must have.

 

Guideline of Wave Equality,

Guideline of Alternation,

Guideline regarding Depth of Corrective Wave

Edited by tech1978
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@tech1978

I know the difference, but somewhere I read what I wrote above.... maybe on lara Iriarte youtube videos ( https://www.youtube.com/user/ElliottWaveAnalysis/featured ) or Elliott_Trader's ( https://www.youtube.com/user/ElliottTrader/videos?disable_polymer=1 )

 

Someone called it a "strong" guideline, and explained what I re-posted here ;)

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Found... page 231 of Gorman & Kennedy - Visual Guide to Elliott Wave Trading

http://i63.tinypic.com/29kyk60.jpg

 

They are just way of expression from different authors or experts.

 

Either one say that Strong Guidelines and weak guidelines or one may divide mandatory wave behavior into rules and optional one into guidelines. So please don't get much into it.

 

Point remains same - Some rules are mandatory and they must not be violated and other like guidelines or you can also say optional rules which most of time occur but not a mandatory that they will occur always.

Edited by tech1978
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Let me repeat my opinion about this subject:

 

If an intersection of wave "4" and "1" occurs, change to a corrective count and consider higher time frame too.

 

 

 

Absolutely Sir. If intersection occurs then either the wave count is wrong or it's a three wave corrective structure.Least consideration would be a Leading or Ending Diagonal but provided it complements the wave structure, has right no of internal waves and has right wedge shape.

Edited by tech1978
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  • 2 weeks later...

Guys, I have a few questions about EW terminology. Does anyone know the official answers by Elliott Wave International?

 

1. Is a Double ZigZag a Double Three, or not?

2. What I mean is: does a Double ZigZag count as "corrective combination"?

 

 

According to EWI, this is the definition of a Double Three:

 

Combination that comprises two corrective wave patterns, labeled W and Y, linked by a

corrective wave pattern labeled X.

 

So if we go with this definition, a Double ZigZag would be a Double Three, right?

Because a ZigZag is a corrective wave pattern. And a Double ZigZag is pattern comprised of "two corrective wave patterns, labeled W and Y, linked by a corrective wave pattern labeled X - as mentioned in the definition.

 

Could anyone confirm/disconfirm?

PS: I know this isn't really relevant for trading. But I still want to know.

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  • 4 months later...

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