waves ABC
Just because we have used in the last example a market for buying does not mean that this theory does not apply to sales markets.
Waves within a wave
Another of the important things you should know about Elliot's theory is that the wave is made up of other small waves.
Elliot Wave waves
See how the Wave # 1 consists of 5 small waves of momentum and wave # 2 is formed of 3 small corrective waves? Each is always formed by small wave patterns.
As you can see, the waves do not fit perfectly in real life. Also learn that sometimes it is difficult to point them out. But the more you look at the graphics more expert you become.
That's all you need to know about the theory of Elliot. Remember that the market moves in waves. Now when you hear someone say "wave 2 is complete" you'll know you mean.
If you want to know more about the theory of Elliott Wave www.elliotwave.com can enter.
