In the 1930, Ralph Nelson Elliott invented a theory that suggested that prices move in patterns that are recurring in nature and one can forecast while applying certain rules and guidelines.
Elliott wave principle categorizes price action in two category:
Impulsive wave - This type of wave moves in the direction of major trend and these waves move in 1-2-3-4-5 structure. In this 1-3-5 wave moves in the direction of the bigger trend whereas 2 and 4 corrects 1 and 3 in opposite direction respectively.
Corrective wave – 80% of the times markets moves in corrective waves. There are different types of corrective patterns like Flat, Zigzag, Triangles.
Nifty daily chart: Applied Hurst Time cycles and trendlines as per cycles
As the market dynamics change one need to be very much open to accept the change and should learn new techniques and objective ways to gauge the market trend to stay ahead of the crowd.
The above chart will make little sense as of now. But trust me once you understand the logic behind how to apply Hurst Time cycles which is based on cluster of cycles applied together it will give lot of vital information with respect to time and the strength of trend. Applying Time is very dynamic but it increases the probability and prediction ability. Also understand when trading markets it is always about probability and not certainty. Knowing when not to trade is also the key to trading success!
Importance of Advanced Concepts-
Basic Elliott wave theory has little touched upon the concept of time. However, Neo wave takes a step ahead and adds the Time element to it. We are taking one more step forward and applying an independent Time concept to forecast markets and then combining it with Neo wave. This increases the probability of success drastically and if you are a derivative – Futures or Options trader this can be one of the best combination tool from trading perspective. While trading it is imperative to get Price and Time both type of confirmation. Time Cycles is one of the most advanced parts of technical analysis which helps to time our trade! Along with Elliott wave analysis, Time cycles give us perfect timing to capture next move.
Stay Tuned for the most Advanced Training session in field of Technical analysis by Ashish Kyal,CMT of Waves Strategy Advisors on Time Cycles and Advanced Elliott wave concepts – NEO Wave combined with JM Hurst Time Cycles to forecast the Elliott wave pattern that can be formed with very high degree of accuracy.
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