1. Interesting Facts: Elliott Wave Theory is just a reflection of the psychology of the traders and outside trend. Years ago it was believed that events outside the market has less or no effect on the market perhaps now it is believed that market is influenced nonetheless the influence is not that consistent. Elliott’s wave follows a pattern which could help the traders derive a preferably close picture revealing what will and what will not happen in the market in the near future with least risk involved.

2. Elliott Wave Pattern: Elliott Waves are of two types.

They are Impulsive and Corrective Waves, with impulsive being 1-2-3-4-5 and corrective being a-b-c. In the Impulsive waves, points that move 1-3-5 are separated by down waves 2-4.

Theory also says that each upward 5-wave will be followed by a downward 5-wave. In the downward 5-wave, 1-3-5 becomes down wave and 2-4 becomes the up wave and this is just a reverse of the upward 5-wave. The second downward 5-wave is nothing but the correction wave.

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