Elliott’s Three Eternal Rules

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Elliott’s Three Eternal Rules

When it comes to being successful with Mr. Elliott (aka Mr. Right), it’s all about being able to identify his waves correctly. Unlike our long list of requirements for the real-life Mr. Right, there are only three rules when it comes to interpreting Mr. Elliott. But these rules are hard-core and can never be broken. They’re even harder than the vows you take at your wedding. No joke.

Rule 1. Wave 2 can never go beyond the start of wave 1.

Rule 2. Wave 3 is always one of the longest impulse waves. (It can never be the shortest of the three impulse waves.)

Rule 3. Wave 4 can never cross into the same price a

Even though wave 3 is typically the longest of the three impulse waves, there is a specific rule that it cannot be the shortest. Wave 1 or wave 5 can be longer than wave 3, but both cannot be longer than wave 3. Elliott wave theory indicates that wave 3 must exceed the high of wave 1. Failure to exceed this high would call for a recount. Impulse moves are all about making progress. Failure to exceed the high of wave 2 would not be making progress.

The third, and final, rule is that wave 4 cannot overlap wave 1, which means that the low of wave 4 cannot go below the high of wave 1. Such a violation would be considered as a red flag. It’s time for a dramatic breakup and finding a new Mr. Right. In forex words, it’s time for a recount.