Elliott Wave Principle: The Basics

The Elliott Wave Principle according to Frost & Prechter:

• One complete cycle is made up of 8 waves
• 5 motive waves (1,2,3,4,5), and 3 corrective waves (A,B,C)
• Waves 1, 3, and 5 effect the prominent directional price movement (Trend)
• Waves 2 and 4 are counter waves to the prominent directional price movement
• Wave 2 never goes beyond the start of wave 1
• Wave 3 is never the shortest wave
• Wave 4 never enters the price territory of wave 1