{"id":56754,"date":"2014-08-14T19:52:24","date_gmt":"2014-08-14T23:52:24","guid":{"rendered":"http:\/\/countingpips.com\/?p=56754"},"modified":"2014-08-14T19:52:24","modified_gmt":"2014-08-14T23:52:24","slug":"2-examples-of-the-forecasting-ability-of-the-elliott-wave-principle","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2014\/08\/2-examples-of-the-forecasting-ability-of-the-elliott-wave-principle\/","title":{"rendered":"2 Examples of the Forecasting Ability of the Elliott Wave Principle"},"content":{"rendered":"
August 14, 2014<\/div>
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By Elliott Wave International<\/span><\/h3>\n

The following article was written by Elliott Wave International’s Senior Instructor Jeffrey Kennedy to show what you can expect from a market at the completion of various Elliott wave patterns. Jeffrey, a Chartered Market Technician and highly sought-after speaker and teacher, will host a free Trader Education Week<\/strong>, August 20-27. Learn
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Some people think the Wave Principle is complicated. But, in reality, all you need to know to find trading opportunities are the five core patterns: impulse waves<\/em> and diagonals<\/em> move in the direction of the larger trend; the zigzag<\/em>, triangle <\/em>and flat<\/em> are corrective waves that move against that trend.<\/p>\n

What is most important to understand about the Wave Principle is that each wave pattern implies a path for future price movement<\/em>. For example, a completed impulse wave implies that prices will retrace into the span of travel of the previous fourth wave, most often to near its terminus. (See graph.)<\/p>\n

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As countertrend wave patterns, zigzags, flats and triangles imply that once they end, a complete retracement will follow. (See graph.)<\/p>\n

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This chart shows a corrective pattern called a zigzag. It is a three-wave move that is typically contained in parallel lines, which I call the corrective price channel. Whenever you see an A-B-C decline such as this where, ideally, wave C equals the distance travelled in wave A, the implied forecast is a move to the upside back to beyond the origin of the pattern.<\/p>\n

For example, the May through September pullback in SolarCity Corporation (SCTY) consists of three waves (a zigzag), which forecasts a rally beyond the May high.<\/p>

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The price chart of Pfizer Inc. provides another example of the forecasting ability of the Wave Principle. A triangle is a wedge-shaped corrective, or countertrend, wave pattern that is fully retraced upon completion.<\/p>\n

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As it stands, this pattern is incomplete and requires additional subdivisions. Even so, this structure implies that the larger uptrend is still intact and that new highs beyond $31.15, the point at which the triangle began, will ultimately develop.<\/p>\n

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Announcing Trader Education Week: Learn How to Spot Trading Opportunities in Your<\/em> Charts<\/a><\/h3>\n

Don’t miss this chance to learn even more from Jeffrey Kennedy with free lessons in an online video format<\/em>. You’ll learn:<\/p>\n