Understanding Basic Elliott Wave Pattern In Stock Market For Beginners

Stock market rise up and down it’s obvious but did you known all the stocks moves in basic phase called Elliott wave. The Theory was fist introduced by R.N Elliot and was named after it was further developed by Robert prchet.

Elliot waves are nothing but a graphical representation of human physiology of emotion when they trade to understand this concept better you check the following patterns.

Here you will find two types of waves the waves which moves I the direction of trend are called impulse wave while those get against it are corrective waves.

If the stock market trend is up or you can say when the stock market is on the rise impulse wave goes in upward direction while corrective wave as always goes opposite direction toward downward just the opposite happens when stock market goes down this time impulse wave goes downward and corrective wave are upward.

How these waves help you as a trader

Corrective wave are upward. Elliott waves are great way to understand the movement of stocks the more better you understand the movement of stocks the more better you understand the more money you are going to make.

Wave 1 : It starts with a uptrend against the sliding market you can also say it’s a signal that market going to rise but we have to wait watch for the pullback to confirm our prediction.

Wave2: Wave 2 goes below the wave 1 highest point but it’s above the wave 1’s lowest point now we are sure uptrend market has just started so be sure to get at this point otherwise you will be going to miss the biggest money making opportunity.

Wave 3: The money maker has just unfolded it is what we are talking about wave 3 has just started it’s the longest of all waves ad most money can be made over this waves you may be highly disappointed when you miss this opportunity. Most experienced traders always looking for a chance to ride this wave.

Wave 4: Surprisingly it goes downward against the wave 3 it’s the last pullback of the uptrend it’s also the signal that market has become slower and it’s the last buying opportunity for traders.

Wave5: this wave gradually moves up but very slowly and also the end of uptrend so it’s better to sell off your stocks and book profits.

Wave A: It moves downward just as any regular pullback but no it’s a starting of a downtrend the wave goes below the wave 5 giving an indication that market is going to break.

Wave B and C

Wave b as you can see is pullback too but it doesn’t go hirer than wave 5 it confirms that that market has started to turn down and c is just impulse wave towards the larger degree.