"Elliot Waves Made Simple" By Steve Sinclair Book Review: Profile Traders
Elliot waves, like any other technical analysis tool, do not guarantee a future movement based on previous patterns.
However, when combined with other tools, they help capitalize on these wave patterns in future forecasting.
Steve attempts to make this theory simple so that most traders stay away from it as they find it overwhelming and complicated.
Elliot Waves in a Glance
The Elliot Waves were conceptualized by Ralph Nelson, it is believed to work not only in the financial markets but also in social interaction and natural phenomena. So the Elliot Waves is not only going to help you understand the trend in financial markets but also the outside world.
It works similarly to the Fibonacci magical sequence that could explain the behavior of the crowds. They expose the fight between optimists and pessimists and the strength they show.
Basics of Elliot Waves
Steve explains the different phases of the Elliot Waves simple manner. The waves move in two phases the motive phases and the correctives phases.
Motive phase
There are 4 patterns that we can identify moving with the larger trend. The patterns formed in the motive phase are labeled 1,2,3,4, and 5.
Impulsive Waves
Extended Waves
Leading Diagonals
Ending Diagonals
Some specific rules guide you to identify these waves and patterns. A fair bit of understanding is needed in identifying trends and forecasting future movements.
A detailed explanation of e