Hi Elliott Waver,

What’s the basic path an Elliott wave takes?

Here’s how Bob Prechter explained it in Prechter’s Perspective: Conversations with Bob Prechter, Legendary Market Theorist:

“Elliott recognized that movement in the direction of the one larger trend subdivides into five waves. Movement against the trend subdivides into a three-wave pattern or some variation involving several three-wave patterns. In true bull markets, the subdivisions occur in five waves up—an up-down-up-down-up sequence. Bear markets tend to occur in three-wave sequences—down-up-down. Each one of those movements has a shape and a personality. As long as you can recognize the shapes that are occurring, you have a handle on what might happen next.”

Bottom line: The market doesn’t move randomly. It moves in recognizable patterns. And when you can identify them in real time, you gain an edge in anticipating what’s next.

To start learning how to spot those patterns, visit our Educational Resources. And to watch our expert team apply the Wave Principle in real time, become a subscriber.

Sincerely,

Derek Bruce
Elliott Wave International