A guide to Elliot Wave Analysis

1. Overview

If you are from business, trade or having finance field than you must know about wave analysis it must be helpful for you and it also assists you in decision-making. Now let’s see what is this wave analysis in actual!

It is basically a financial tool which helps in making analysis like technical analysis related to finance, financial market trends. Wave Analysis basically tells you about price movement trend in the financial market.

Just have a glance that Why we need it!

2. When You Need to do Wave Analysis?

Here are some reasons that why should we need trend analysis:

1. The main reason comes out is that we need wave analysis to find out the trend of price. Yes, it is important to rule in the market that you know about the trend of market price. You should have the knowledge about that when the price goes up and when it goes down before somebody else or News informs you and you have to face heavy loss. For this reason wave Analysis here for you to analyze the price trend of the financial market and help you to make a better decision.

2. The Neo Wave Theory analysis keeps you aware of the economic scheme which may release in coming days and you can see that the wave analysis trend already alert you about this. This Analysis is very helpful because it makes you aware of any disaster situation.

3. The news often plays with your sentiments for example if you here that by every day the Dollar price decrease then you must not buy Dollar and instead of this you will sale Dollar. But on the other hand, if you take help with wave analysis then it actually tells you that what will happen in future like the value of Dollar may increase in future. If you don’t do this analysis then might you regret?

3. How does it look like?

Now you have much understanding of wave analysis. Now I will tell you what is really wave analysis and how does it look like?

There are two types of waves which wave analysis shows the impulsive wave and corrective wave. Impulse wave actually goes in larger degree wave direction and when this larger degree wave arises then the wave which is up is the impulsive wave and the wave which is going down is a corrective wave.

Impulsive wave

Impulse wave is a wave which actually showed a trend of market price. If the impulse wave trend is raising then its mean you can in the position of buy and if impulse wave trending downward it mean you are in selling position. The impulse rate is beneficial for those who want quick profit when market trend is very fast.

Corrective wave

The corrective wave is opposite of the impulse wave. It actually shows that movement next to the trend. The great effort among two against trending degrees usually realized that corrective waves less noticeably recognized than impulsive waves. Even corrective waves are somewhat a speck more diverse than impulsive waves.

4. Rules for Wave Analysis

There are some rules for wave analyses which are implied to determine the price trend, this can assist with correctly determine the waves:

  1. Wave 2 which is corrective cannot go back over 100% of Wave 1
  2. Wave 3 should not be the smallest wave, it is frequently the greatest or might the same length as Wave 1 or Wave 5
  3. Wave 4 should not enter the price stroke of Wave 1, though, there is one exemption to this.

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