In a simple and accessible form, give the basics of the basic course on wave analysis by Ralph Elliott- the most expensive in all kinds of "Forex education" courses and the most difficult of all sections of the technical analysis of trading.

We have - this is the material of the 11th grade of the School of Beginner Traders at the Academy Masterforex-V on a closed forum where training starts from scratch - a basic school course, then Elliott wave analysis models and their interpretations of the MF are used as hints on the Academy's closed forum.

To understand the essence of Elliott wave analysis, you need to realize 3 things, without which it will be difficult for you to become an experienced professional trader who makes a living trading:

Below is the Elliott wave analysis model. It is unlikely that you will remember them from the first and even from the second time, but just try to determine for yourself where:

• trend - the momentum on which you need to open deals;
• and where is the correction, understanding that this knowledge is an obligatory PART of your future professionalism and success in Forex.

Elliott wave theory gives an algorithm for the movement of Forex currency pairs

A trend (impulse waves) has a 5-wave structure (waves are denoted by numbers 1, 2, 3, 4, 5, A, B, C) and consists of impulse and correction waves.

1. Impulse waves 1, 3, 5:
   • longer correction waves;
   • show the direction of the trend.
2. Correction waves:
   • 2nd and 4th waves, each of which has a 3-wave structure (a-b-c) and shows the direction opposite to the current trend.

Rice. 2. Pattern of an uptrend (bullish) trend

The Importance of Elliott Waves for a Forex Trader

1. To follow the trend, you need to see the DIRECTION of the trend - impulse waves that are longer than correction waves.
2. Wave analysis allows you to see at what point of movement currency pairs are in terms of the structure of the wave movement (whether the trend starts or is already ending).
3. The goals of the movement of the trend waves (if the top of the 1st wave is broken, then the 3rd wave will reach at least 162%).

Sub-wave structure on a trend

1. The 1st, 3rd, 5th impulse waves have a 5-wave structure of their subwaves.
2. Correction waves (2 and 4) have a 3-wave structure and are designated A-B-C.

Rice. 3. Wave structure of momentum and correction
Rice. 4. Structure of subwaves

Characteristics of each wave

• Wave 2 = 0.382-0.618 of the length of the 1st wave.
• Wave 3 = 1.618-2.618 of the length of the 1st wave.
• Wave 4 = 0.382-0.5 of the length of the 3rd wave.
• Wave 5 = 0.382-0.618 of the length of the 3rd wave (5th wave = 1.618x1 wave if extended).

• Wave A = 1, 0.618-0.5 of wave 5.
• Wave B = 0.382-0.5 of wave A.
• Wave C = 1.618 or 0.618-0.5 of wave A.

• In the 2nd wave, A = B = C, or A = 0.618 × 1 wave, B = 0.618 × A wave, C = 0.618 × B wave, that is, a converging triangle.
• In the 4th wave, A=C, or A=0.618×3 wave, B=0.618×A wave, C=0.618 (or 1.618)×B wave.
• In the 4th wave, B \u003d 0.236 × A wave.

Waves and Slanted Trend Channels

• the top of the 1st and 3rd waves;

This will allow you to see

• top of the future 5th wave.

being drawn

• then after the end of the 4th wave - the final channel (Final Channel).

Rice. 5. Temporary inclined channel
Rice. 6. Final inclined channel

Elongated and truncated waves

• the top of the 1st and 3rd waves;
• parallel channel from the bottom of the 2nd wave.

This will allow you to see

• the expected level of rollback of the 4th wave;
• top of the future 5th wave.

being drawn

• first the Temporary Channel;
• then after the end of the 4th wave - the Final Channel (Final Channel).

Rice. 7. Extended 3rd wave Rice. 8. Varieties of extensions

Questions of the next level of education (Masterforex-V Academies)

• Why can the number of elongated waves in an impulse be 5, 9, 13... (call the numbers below)?
• Why in the correction the number of extended waves can be 3, 7, 11... (call the numbers below)?
• What formula do the classics of wave analysis have for counting sub-waves of lengthening in an impulse and correction?
• If the number of sub-waves in the lengthening is 15 and 17 - which of them is the impulse wave, and which is the correction of the older one?

truncated waves

The 5th truncated wave does not break through the peak of the 3rd wave. Criteria for a truncated 5th wave:

• has a 5-wave structure;
• a truncation usually occurs after an extremely strong 3rd wave.

Rice. 9. Truncated fifth wave
Rice. 10. Bullish and Bearish Truncation

Fibonacci levels and Elliott waves

The Fibonacci sequence is numbers in which each subsequent digit is equal to the sum of the previous two 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, etc.

Fibonacci Levels (Golden Ratio)

• After the first few numbers in the sequence, the ratio of any number to the next highest is about 0.618 to 1, and to the next lowest is about 1.618 to 1.
• The ratio between numbers one after the other in the sequence is approximately 0.382, which is the inverse of 2.618 (1:2.618*).

This ratio is used in wave analysis to calculate the goals of the movement of impulse and retracement waves.

1. Momentum wave = Fibonacci extension levels (162-362% of wave 1).
2. Correction wave = 23-76% of the previous wave.

Respectively,

Alternative-3 force majeure = cancellation of the 5-wave trend (additional wave criteria). Drawings.

Right

Rice. 16. The third wave of the correct length

Significance for the trader of the axioms of wave analysis and force majeure that cancels the momentum

1. If the impulse is canceled there is no continuation of the trend.
2. The currency will not stand still (if it cannot go up, then it will go down).
3. The Masterforex-V Trading Academy daily provides both versions of the trading plan with clear criteria for switching from one option to another.

Typical mistakes of traders

Elliott wave levels

Essence:

• the market moves according to the laws of the wave theory of several wave levels;
• one wave level = 5 waves of impulse and 3 waves of correction;
• a full cycle of 5 waves of momentum and the 3rd wave of correction is just one wave of a higher level;
• this wave of a higher level is just a sub-wave of the next level.

Prechter gives 8 levels for numbering waves using the following "near Elliott" symbols.

Tab. 1 Classification of wave levels according to Prechter

Thus, according to Prechter's calculations (a continuation of the logic of Elliott's calculations) since 1932, the rise of the US stock market is in the 5th wave of the 3rd (main) level.

• 1932-1937 - the first wave of the main level;
• 1937-1942 - the second wave of the main level;
• 1942-1966 - the third wave of the main level;
• 1966-1974 - the fourth wave of the main level;
• 1974-19?? - the fifth wave of the main level.

Rice. 21. Prechter Supercycle

An example of the designation of waves by classical waveforms and their interpretation

Rice. 22. Classical wave counting of the market movement

Drawing interpretation:

• 1st wave of intermediate level;
• consists of 5 waves of the secondary level (1), (2), (3), (4), (5);
• minute level shows waves 1, 2, 3, 4, 5 a-b-c.

Structure of waves of several wave levels

Rice. 23. Ratio of wave levels

Diagonal triangles as special 1st and 5th impulse waves

Special wave formations in waves of impulse of the 1st or 5th wave, in which the 4th sub-wave (of a shallower level) enters the zone of the 1st wave.

Signs of a trend reversal in terms of wave analysis

1. Final diagonal triangle.
2. Extended 5th wave.
3. Truncated 5th wave.

Correction models and principles of their alternation

The 2nd and 4th waves are corrective.

Rice. 29. Corrective waves in a five-wave pattern

Movement on these waves takes the form of the following correction patterns:

1. Zigzags (5-3-5) (Zigzags), or a simple (zigzag) correction.
2. Planes (3-3-5) (Flats), or flat (flat) correction.
3. Triangles (3-3-3-3-3) (Triangles), or Triangular correction.
4. Double triples and triple triples (combined structures).
5. Wrong correction.

Classic wave analysis correction models

Simple (zigzag) correction (sub-wave structure 5-3-5).

Rice. 30. Corrective figure "Zigzag"

Its variety is double zigzag.

Rice. 31. Corrective figure "Double Zigzag"

Flat (flat) correction (sub-wave structure 3-3-5)

It differs from the previous model (zigzag) in that:

• the sequence of its subwaves is 3-3-5;
• has the shape of a flat (flat) instead of a directional movement, as in a zigzag correction;
• usually precede or follow wave lengthenings.

Rice. 32. Correction figure "Plane"

Triangular Correction, or Horizontal Triangles

• 3-3-3-3-3 and are marked a-b-c-d-e.

Rice. 33. Horizontal Triangle

Double and triple triplets

Rice. 34. Double Three Rice. 35. Triple Three

There are two types of triangles: converging and diverging.

Converging triangle

Rice. 36. Converging Triangle Rice. 37. Converging Triangle
Rice. 38. Converging triangle in the fourth wave

Divergent triangle The principle of alternating correction patterns in depth and structure on the 2nd and 4th wave

The essence of the alternation is that if the 2nd wave is a sharp correction, then the 4th wave will be a side correction and vice versa.

Rice. 42. Simple 2nd wave and complex 4th
Rice. 43. Simple second wave and complex 4th

Brief conclusions of Masterforex-V about Elliott wave analysis

1. This is the brief essence (basics) of the Elliott wave analysis, set out in hundreds of pages of books by Prechter, Frost, Fisher, Vozny, Balan and other classic wavers.
2. This material, in one form or another, is given in expensive courses at Dealing Centers and brokerage campaigns as the highest stage of Forex technical analysis.
3. This material is presented in Masterforex-V Academy as initial Forex analysis and education stage (11th grade of the School for Beginner Traders at the Masterforex-V Academy).
4. At the closed forum of the Academy (the theory of the Masterforex-V trading system, other TS and DAILY practice of applying the theory to specific trades) - numerous examples of methodological and practical errors of the classic wave analysis of trading, including examples as masters of wave analysis for 6 working days 5 (!) times redo their previous wave analysis. So, currency pairs absolutely go NOT in this way and NOT where they are prescribed by the "laws" of wave analysis in the interpretation of a particular master (D. Vozny and others).
5. In the following chapters of the book, we will try to reach the METHODOLOGICAL shortcomings of specific methods of Elliott wave analysis, the solution of specific unsolved mysteries of the classic Elliott wave analysis in the Masterforex-V trading system, which, I hope, will help traders in Forex.

Elliott Wave Theory

2.2.1. Complex corrections with small X7 waves

In his work "The Mastery of Elliott Wave Analysis" G. Neely gives eight types of corrections with small X-waves, six of which begin with a zigzag, and two - with flat corrections. Consider in order all possible options.

double zigzag

The internal structure of this wave has the form (5 - 3 - 5) - (X) - (5 - 3 - 5), its appearance and the possibility of drawing signal lines for a double zigzag are shown in Figure 2.2.1.1.

Fig. 2.2.1.1.

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Elliott Wave Theory

The signal line of a double zigzag is the line B - B. It is built according to the end points of waves B, and the end point of the X-wave can also lie on this line. Naturally, each zigzag has its own signal line 0-B, and each wave C has its own signal line 2-4. Waves of Complex Correction. Thus, I draw your attention to the fact that in cases where the probability of a Complicated Correction is high, it is better to use a conservative scheme for opening a position.

triple zigzag

The internal structure of this wave has the form (5 - 3 - 5) - (X) - (5 - 3 - 5) - (X) - (5 - 3 - 5), its appearance and the ability to build signal lines for a triple zigzag are presented in figure 2.2.1.2.

Fig. 2.2.1.2.

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Elliott Wave Theory

Just like in the case of a double zigzag, the signal line of a triple zigzag is the line B - B - B, and X-waves can either slightly cross or not reach this line. And failure is more likely. Models of double and triple zigzags are characterized by relatively large size, high speed of price movement, and clearly fit into parallel channels. If we imagine the control of the development of such a wave in real time, then it would be preferable to open a position not at the end, but at the beginning of such a wave. In addition, it is not so easy to “catch” the moment of completion of such a wave, because. there are complex corrections with small X-waves, such as double and triple combinations. They differ from double and triple zigzags in that instead of the second and third zigzags, respectively, there is a narrowing triangle.

Double combination (starting with a zigzag)

G. Neely identified two types of double combinations with small X-waves starting with a zigzag. Their internal structure respectively looks like (5 - 3 - 5) - (X) - (3 - 3 - 5) - zigzag + flat correction and (5 - 3 - 5) - (X) - (3 - 3 - 3 - 3 - 3) - zigzag + narrowing triangle. The appearance and the possibility of building signal lines are shown in Figures 2.2.1.3. and 2.2.1.4. respectively.

Fig. 2.2.1.3.

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Elliott Wave Theory

Wave A of a flat correction can have any corrective internal structure from zigzags to complex corrections (see the "Flat Correction" section). This circumstance can make it very difficult for the waves to group during the formation of this type of correction. In addition, a breakdown of the line B - B of a double zigzag is an obvious signal to enter the market, and only effective control of the developing wave structure will make it possible to make the necessary changes in trading tactics in a timely manner, namely, having seen the development of a corrective wave model, close the position.

However, the double combination zigzag + flat correction has a quite adequate signal line, the breakdown of which clearly indicates the completion of the second phase of the Difficult Correction, but not the end of the entire Difficult Correction, because. development of a triple combination is possible. In addition, wave C of a flat correction will have its own signal line 2 - 4.

Fig. 2.2.1.4.

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Elliott Wave Theory

The double zigzag + contracting triangle combination is even more difficult to interpret in real time. The worst option can be considered the case when A wave of the triangle has a zigzag structure. In this case, there is a possibility of opening a position, and there is simply no effective stop level, because. the completion level A of the contracting triangle wave can be crossed in the process of wave C formation. The only more or less adequate signal line for this wave model is the B-D line of the contracting triangle. Unfortunately, it can only be built at the very last moment before the model is completed.

Complicated corrections with small X-waves ending in contracting triangles are the case when the contracting triangle is a reversal pattern. Classical technical analysis considers a contracting triangle as a trend continuation pattern. And indeed, when it takes the place of independent corrective models, it serves as a basis to count on the continuation of the trend. However, in cases where the contracting triangle is the final phase of a Complicated Correction with a small X-wave, it can rightfully be called a reversal pattern.

triple combination

In his work “The Mastery of Elliott Wave Analysis”, G. Neely identified two types of triple combinations with small X-waves, both of them begin with a zigzag, but no other types of triple combinations with small X-waves were identified. Their internal structure, respectively, has the form (5 - 3 - 5) - (X)

- (5 - 3 - 5) - (X) - (3 - 3 - 3 - 3 - 3) - zigzag + zigzag + contracting triangle and (5 - 3 - 5) - (X) - (3 - 3 - 5) - (X) - (3 - 3 - 3 - 3 - 3)

- zigzag + flat correction + narrowing triangle. The appearance and the possibility of building signal lines are shown in Figures 2.2.1.5. and 2.2.1.6. respectively.

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Elliott Wave Theory

Fig. 2.2.1.5.

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Elliott Wave Theory

This pattern, in the process of its formation, can resemble anything, from trend impulses to all existing variants of complex corrections with small X-waves starting with zigzags. Thus, the use of aggressive entry strategies can lead to multiple stops being triggered, and a conservative entry strategy will not allow you to open a position before the A wave of the closing triangle pattern. In this case, a stop placed at the beginning of wave A of the contracting triangle (in real time this point may look like the end of a triple zigzag) is not guaranteed to be triggered, but it is very unlikely. It is encouraging that, at least, G. Neely does not single out more complex wave patterns than triple combinations. Therefore, the breakdown of the line B - D of the contracting triangle clearly indicates the completion of the current corrective model, and the level of point D is an ideal place to open a position. No matter where this triple combination occupies, by its nature this wave has a very impressive size, and given the final consolidation, it promises a rather powerful movement after a reversal.

Fig. 2.2.1.6.

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Elliott Wave Theory

The triple combination zigzag + flat correction + narrowing triangle is the most difficult wave pattern to interpret in real time. But even after its completion, it is very difficult to correctly group the existing price fluctuations. In all other respects, everything that is said about the previous wave model, described in Figure 2.2.1.5, is true.

Double combo (starting with a flat correction)

In his work "The Mastery of Elliott Wave Analysis" G. Neely distinguishes two types of such corrections. Their internal structure looks like (3 - 3 - 5) - (X) - (3 - 3 - 5) - flat correction + flat correction and (3 - 3 - 5) - (X) - (3 - 3 - 3 - 3 - 3) - flat correction + narrowing triangle. Other variants of difficult corrections starting with flat corrections will be discussed in the section "Complex corrections with large X-waves". The appearance and the possibility of building signal lines are shown in Figures 2.2.1.7. and 2.2.1.8. respectively.

Fig. 2.2.1.7.

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Elliott Wave Theory

Regardless of the ratio of waves within each flat correction, the B-B signal line will be the most effective in this price pattern. Considering that a triple combination in this case is impossible (at least, according to G. Neely), the line 2 - 4, built relative to the last wave C, will provide an opportunity for an aggressive entry into the market. This entry will be effective if the second flat correction does not take the place of wave A of the contracting triangle. Then we are dealing with the following configuration.

Fig. 2.2.1.8.

In the case of the development of this configuration, the line B - B may coincide with the line B - D of the contracting triangle, but may not coincide. In any case, their location will be very similar, and both of them will effectively solve the problem of confirming the end of this configuration.

So, we have considered all options for complex corrections with small X-waves. Considering examples of real situations and places of possible occurrence of complex corrections will be optimal after four variants of complex corrections with large X-waves have been studied.

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Elliott Wave Theory

2.2.2. Complex corrections with large X7 waves

G. Neely singled out only four types of such corrections, all of them begin with flat corrections, moreover, zigzags, according to Neely, do not participate in the formation of corrections of this type at all. All large X-wave retracements either consist of only flat retracements or end in a narrowing triangle.

A feature of the formation of complex corrections with large X-waves is the relatively large size of the X-wave compared to the previous corrective phase. As I said above, I think that it should not be compared with the entire corrective pattern, but only with its final wave. True, in the case of the formation of a classic flat correction, this is one and the same. Yes, and the classification of complex corrections by the size of the X-waves can also be disputed, because. in the Forex market, the size of the X-wave may not reach the benchmarks indicated by Neely. In any case, when grouping and classifying wave models into standard and non-standard price figures, the internal structure of the waves that make up the model will play a decisive role.

Double and triple flat correction

These models have an internal structure (3 - 3 - 5) - (X) - (3 - 3 - 5) - flat correction + flat correction and (3 - 3 - 5) - (X) - (3 - 3 - 5) - (X) - (3 - 3 - 5) - flat correction + flat correction + flat correction. Their appearance and possibilities for building signal lines are shown in Figures 2.2.2.1. and 2.2.2.2. respectively.

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The theory of wave analysis is a little less than a century old, but it still enjoys considerable popularity among traders. It is based on graphic patterns that are repeated on the market with a certain frequency.

In the classical form, the trend of any financial instrument using wave analysis can be represented as follows:

Waves that are directed towards the dominant trend are called impulses or current ones. Waves that are opposite to the main trend are called corrective or counteracting.

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The figure shows a general example from wave analysis theory. In fact, there are many types of Elliott waves. Let's analyze some of them.

Threes and five-waves

This is the standard representation of waves in Elliot theory. The five-wave consists of three impulses and two corrective waves, while the third wave cannot be smaller than any other, and the fourth must not enter the area of ​​the first.

The traditional five-wave pattern is shown in the figure above and is marked with numbers 1, 2, 3, 4 and 5, where waves 1, 3 and 5 are impulses, and waves 2 and 4 are corrections.

The triple consists of three waves - two impulses and one corrective. In the figure above, the three is shown in the area marked in Latin letters. Waves a and c are impulse, and wave b is corrective. Traditionally, the designation of a wave is indicated at its end (extremum).

Wedge and triangle

The formation of diagonal triangles is characteristic either for the beginning or for the end of a trend. The rules for their formation are somewhat different from the classical model of wave analysis. A wedge occurs at the beginning of a trend, and at the end of the trend, an ending diagonal triangle is formed. Consider the rules for the formation of a wedge using an example.

A wedge is a traditional five-wave impulse. It differs from the classical one in that the extremum of the fourth wave falls into the area of ​​the first, which cannot be with the standard wave counting.

Impulsive waves (1, 3 and 5) are a traditional five-wave pattern, and corrective ones are a triple.

The diagonal triangle differs from the wedge only slightly. It looks exactly the same, but it usually forms at the end of a trend, and its waves (both impulses and corrections) consist of triples. An example is shown in the figure below.

Zigzag

You can see the traditional zigzag shape in the figure below. It consists of three waves. Waves (a) and (c) in the diagram are represented by impulses and consist of five waves.

Wave (a) can act as a wedge, and wave (c) can act as a final diagonal triangle. Corrective wave (b) usually takes any form and consists of three waves.

The chart shows a zigzag pattern for a downtrend. If the financial instrument grows, the waves will take an inverted form.

There are also double and triple zigzags. A double zigzag also consists of three waves, with the first and last waves (in the direction of the trend) being the traditional zigzag shown in the figure above. The corrective wave connects them.

A triple zigzag is similar to a double zigzag. The only difference is that it consists of three typical zigzags connected by correction waves. Such a figure most often occurs if the price of a financial instrument makes a deep correction.

The presented models of wave analysis in Forex are universal. They can be formed on any time period of any currency pair or other financial asset. The difficulty of wave analysis lies in the difficulty of identifying models on a real chart due to the trader's subjective assessment of the situation.

From this lesson, we will begin consideration of the whole variety of compound corrective wave patterns that are formed from the zigzags and planes we have already studied. Corrections are the hardest part of wave analysis. It is much easier to mark a developing impulse than a correction, because in the latter the number of possible combinations from known patterns is quite large.

double zigzag - these are two zigzags separated by a corrective wave-bundle, which can take the form of absolutely any corrective wave pattern, but most often it ends in the form of a regular zigzag. As a rule, a double zigzag is a deep correction in relation to the wave being corrected.

Consider the structure of this model in the figure below:

So, the main acting waves of a double zigzag are denoted W And Y, corresponding to the wave level on the markup (in the example, the Minuette level is used). The active waves here are zigzags, but if we remember their structure, it will become clear what actually moves this model. impulses in the waves A And WITH each of the two zigzags. The counter wave in a double zigzag is marked with the symbol X(again remember about wave levels).

An important point is the transition point of the correction from a regular zigzag to a double one. Most often, this happens when the first zigzag failed to correct the previous trend, neither in time nor in amplitude. It is in this case, after a local correction, that another zigzag begins to develop. Bundle wave X can be interpreted as the beginning of a new trend wave. If you opened a trade at the end of a wave B, taking it as the second wave, then in the course of the development of wave C, it would be most reasonable to transfer the stops into a breakeven.

In the markets, this model is formed with some features, which will be discussed below. The model can satisfy all the rules double zigzag, but due to the ratio of some component waves, discrepancies sometimes appear in the wave count.

Double zigzags can be divided into two groups - patterns with a long or deep X wave and patterns with a relatively small linking wave. Some options for the formation of double zigzags from the first group are presented in Chart 1.

Chart 1

Chart 1 shows two varieties of double zigzags. In the first case, wave X took the form extended horizontal correction. In the second case, wave X is a deep correction, zigzag. Such models, as a rule, do not cause inconsistencies in markup.

Chart 2

Now let's look at Chart 2. It shows a double zigzag with a long, and rather horizontal, linking wave. Wave [y] in this example significantly exceeds wave [w] in amplitude. Unequal amplitude of acting waves double zigzag common, especially in the forex market. It is also interesting that the wave (c) of [y] here it is in the form diagonal triangle, thus confirming the end of the entire wave X .

Graph 3

The double zigzag in wave X in Chart 3 is a great example of a pattern with a continuous linking wave. Note that the [w] , [x] and [y] waves are themselves double zigzags. The double zigzag marked as an ellipse will be considered below.

However, if the bundle wave X is shallow in amplitude and short in time, then other marking options appear.

Chart 4

So, if 4 impulses are formed, and the wave-link X is not more significant than the other two opposing waves, then two more variants of the wave counting are possible. This is a zigzag with an extended wave A or wave C. In each of the options, it is important to comply with critical levels (shown by the red dotted line in Chart 4).

If we assume that wave A is lengthening, then the wave in its composition should not go beyond the end of wave [i] . All other impulse rules must also be followed.

In the variant with wave C lengthening, it is important that the wave does not renew the end point of wave B, and the wave does not go beyond the end of wave [i] .

Chart 5

Before us is the same selected double zigzag from Graph 3. It can be seen that the end of the wave b of (y) went beyond the wave completion level (w). Thus, this wave pattern can be defined solely as double zigzag, and nothing else.

Chart 6

It would seem that in Chart 6 we have a common double zigzag, but not everything is so simple, especially on the GBP/JPY cross. The opposing waves differ only in duration, all of them horizontal direction. Moreover, the wave X gives way to the wave [B] of y by time span. Let's try to mark this section of the chart a little differently.

Chart 7

After a simple regrouping of waves, you can get a zigzag with a significantly elongated wave With. The disadvantage of this option is the duration of the wave b- She is the smallest. But there is another option.

Chart 8

Now the wave is lengthened on the chart A. Correction in a wave b- the longest among other corrective waves. More than that, the wave b is oblique triangle(this model, discovered by Dmitry Vozny, we will study later). In my opinion, this markup is the most suitable for this section of the chart.

Of course, someone may consider that a double zigzag is more appropriate here, as in Chart 6. Both markings have the right to exist, and the choice between them is based on taking into account the characteristics of specific waves in a certain place on the chart.

A price move like in Charts 6-8 can be an unfortunate start to an impulsive price move. For example, after the release of some news, the trend that has begun breaks down, and the movement in the trend of a larger order continues.

We can draw the following conclusion. If a bonding wave X is long, then questions and identification of the model do not arise. In the case of a small wave X, other marking options are possible.