Wave Analysis Cheat Sheet: Master Technical Analysis Wave Analysis Cheat Sheet: 🌊 Master the Market with Ease
What is Wave Analysis?
Wave Analysis, developed in the 1930s by Ralph Nelson Elliott, breaks market cycles into predictable patterns 📊. These 13 recurring waves move prices in repetitive cycles but vary in size and timing.
How It Works: 🔄
Market moves are cyclical:
5 waves 📈 follow the main trend (Motive Waves).
3 waves 📉 move against the trend (Corrective Waves).
This framework helps traders forecast price movements and sharpen their entry and exit points 🎯.
Key Wave Types
1. Motive Waves 🚀
Action waves that align with the dominant trend.
🔥 Impulse Waves: Strong price push, always in 5 sub-waves.
🌀 Diagonal Waves: A twist on Motive Waves, forming patterns like Leading or Ending Diagonals.
2. Corrective Waves 🔄
Reaction waves moving against the trend.
🛑 Cannot be divided into 5 waves (unlike Motive Waves).
Common Types:
Zigzag Waves ⚡: Sharp corrections that mimic an impulse.
Flat Waves ➡️: Sideways corrections with sub-waves A-B-C.
Triangle Waves 🔺: Consolidation patterns signaling continuation.
Common Patterns in Wave Analysis
Impulse Waves:
Push prices 📈 in the trend direction.
Rules: Wave 4 must NOT overlap Wave 1—strictly 5 sub-waves.
Diagonal Waves:
Motive Waves with unique structures 🌐, like Leading or Ending Diagonals.
Corrective Waves:
Push against trends 📉 with patterns like:
Zigzags ⚡ (single, double, or triple).
Flats ➡️ (regular, expanded, or running).
Triangles 🔺 (contracting or expanding).
Trading Insights 💡
Wave 3: The Trader’s Favorite
Wave 3 often packs the most momentum 🔥—the perfect time to ride the breakout!
Why Use Wave Analysis? 🌊
Wave Analysis isn’t just theory—it’s your key 🔑 to decoding market psychology and making smarter moves. By spotting patterns early, you can:
Anticipate price moves 🎯.
Maximize gains 📈.
Minimize losses 📉.
Use this cheat sheet as your go-to guide for riding the market waves 🌊🚀!
