FORUM: HOW TO COUNT ELLIOTT?

QUESTION: My question is regarding COUNTING. I want to know that at which point of time one should change the count from 1 to 2 and from 2 to 3. i.e. how we can confirm that wave 1 is over and wave 2 has began. Is it so that on every positive and negative bar on daily, weekly or monthly we need to change or alter the count? Or counting is just a visual interpretation of finding a pause of a sharp pull back in any rally.

ANSWER: Elliott waves are fractals, so there are more than one indication when a wave could be ending or begining. If you are new to wave counting getting accustomed to a five and three wave structures should be the first step. If you can differentiate between the two, you will realise that impulses (1,3,5) are diffrentiable from (2 and 4) in both form and magnitude. Three wave corrective or counter trend structures generally retrace 38.2 - 61.8%. The illustration shows how the second waves retraced and clearly indicated that the 3 or the next impulse higher should begin.

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