Examples of Wave Structures

Examples of How the Modified Wave Structure Provides Superior Results

Having covered the modifications in Chapter 3 together with the common wave relationships in this chapter, the key now is to prove that these modifications produce superior results. Having applied this approach for some years I have found it to produce astounding success, and many of my subscribers comment on the accuracy of my support and resistance levels. These are a direct reflection of both the structure and ratios I employ.

First let us take a look at the first example of a five-wave move (Figure 4.6).

This was shown in Figure 3.3 that identified a rally in the five-minute market of EURUSD.

Figure 4.6 A Five-Wave Rally in the Five-Minute EURUSD market

 The levels of the major turning points have been labeled in this chart. Table 4.1 displays the wave relationships for each section of the rally.

Very clearly the wave relationships of the major five waves have a maximum variance of four points, and the (a)(b)(c) waves which form the five waves have a maximum variance of just two points, with just one exception being the Wave (c) of Wave (iii) which had a variance of six points.

This type of corroboration between the impulsive waves and the individual (a)(b)(c) waves of which they are formed together with the relationship of the entire five-wave sequence is crucial and confirms the entire move. A traditional five-wave development (or extended five-wave) in Elliott's original structure would not hold relationships between the waves.