These three Elliott wave concepts may improve trader's analysis skills or improve their trade timing, but it is not without its own issues. The theory can be complex to apply, as it isn't always easy isolating the five-wave and three-wave patterns.
In theory, Elliott wave patterns are fractal and should apply to any time frame. Therefore, the "best" time frame to use is the one you're most comfortable trading. If you're a day trader, you may use one-minute, five-minute, or one-hour candles. If you're a swing trader, you may use four-hour, daily, or weekly candles. If you don't know what your strength is, then try multiple time frames in a demo account to see which one works best for you.
If a wave breaks a rule, such as wave three failing to break the high of wave one, then that means your initial assessment of the waves was wrong, and you need to "recount." You may need to zoom out or look at another time frame to recalibrate your theory about where the stock is within the Elliott wave count.
The first phase of the Elliott wave theory trading principle consists of 5 waves. Waves 1, 3 and 5 move in the direction of the main trend. They are collectively known as the Impulse waves. Waves 2 and 4 move against the main trend and are known as the Corrective waves.
Excellent analytical work on the Elliott Wave principle proposes that one can study stock market movements with the help of patterns that come together to represent more significant wave-like movements. This work describes how an understanding of Elliott wave theory can help unravel the mysteries of seemingly random stock market movements and can be used to forecast future market trends accurately. The authors assert the underlying scientific principle behind this system can be found at work in nature, art, and mathematics, as well as in the human body, and go on to analyze historical ups and downs with the help of this system. Almost academic work with practical applications in finance and studying stock market behavior. 2b1af7f3a8