Like we mentioned earlier, Elliott waves are fractals.
Each wave is made of sub-waves. Huh?
Let me show you another picture. Pictures are great, aren’t they? Yee-haw!
Do you see how Waves 1, 3, and 5 are made up of a smaller 5-wave impulse pattern while Waves 2 and 4 are made up of smaller 3-wave corrective patterns?
You’re seeing fractals!Always remember that each wave is comprised of smaller wave patterns.
This pattern repeats itself…
To make it easy to label these waves, the Elliott Wave Theory has assigned a series of categories to the waves in order of the largest to the smallest. They are:
- Grand Supercycle (multi-century)
- Supercycle (about 40–70 years)
- Cycle (one year to several years)
- Primary (a few months to a couple of years)
- Intermediate (weeks to months)
- Minor (weeks)
- Minute (days)
- Minuette (hours)
- Sub-Minuette (minutes)
A Grand Supercycle is made up of Supercycle waves which are made up of Cycle waves which are made up Primary waves, which is made up of Intermediate waves which are made up of Minor waves which are made up of Minute waves which are made up of Minuette waves which are made up of Sub-Minuette waves. Did you get all that?Okay, to make things much clearer, let’s see how an Elliott Wave looks in real life.
As you can see, waves aren’t shaped perfectly in real life.You’ll also learn it’s sometimes difficult to label waves.
But the more you stare at charts the better you’ll get.
Besides, we’re not going to let you go at it alone!
In the following sections, we’ll give you some tips on how to correctly and easily identify waves as well as teach you how to trade using Elliott Waves. Surf’s up!