Waves appear repeatedly in the market. Eliot named them one by one, defined them one by one, illustrated them separately, and explained how they were connected to form their own large-scale variants. This is the form.

1, the basic form of waves

-periodic fluctuation of eight waves: five waves rise, three waves fall, and cycle.

why are the five waves rising?

It meets the minimum requirements of oscillation and traveling in linear motion: one wave will not oscillate, at least three waves will; Three waves will not travel, at least five waves will; The most effective marching by stages is 5-3 cycles.

2. Waves have different scales and levels.

For example, there is a trend, ranging from a century-long super cycle to a few hours short cycle, but the basic eight-wave cycle form remains unchanged. Each level of waves can be divided into smaller waves at the next level, and they are all components of the waves at the next level.

How to distinguish the three-wave and five-wave structures?

See if the running trend of this wave is the same as that of its upper level. If it is the same, it is five waves, and if it is different, it is three waves.

Significance of distinguishing the structure of three waves and five waves

3. Levels of waves

Eliot divides the trend into nine levels, and each level of waves has different names and signs, which are three sets of Arabic numerals and Roman numerals respectively. Alternately marked in lowercase. Investors can know the current market position, that is, what stage the current market trend is in a wider range. In general application, they only need to identify the relative series.

The level and hierarchy division of waves

The above symbols are not unique and legal, and other symbols can be used. The length of each wave is not equal, and it can be compressed, extended, simple and complex. Everything should be based on the pattern.

4. The principle of wave counting

The pattern is the basis of wave theory, and the correct wave counting method is the analytical premise of wave theory. The most basic wave counting rules are as follows: ① The third wave can never be the shortest wave among the 1-5 waves; ② The wave bottom of the fourth wave cannot be lower than the wave top of the first wave. (Except for the inclined triangle) ③ Alternating principle: "In almost all waves, The wave pattern can be said to be maintained in an alternating form. The market will not evolve in the same way: the top and bottom of the last wave will never be the same as the last one. If the second wave appears in a simple form, the fourth wave tends to appear in a complex form, and vice versa. (The probability of the fourth wave appearing in a complex form is very high, and it usually completes its adjustment trend within the scope of the fourth small wave at a lower level.) ④ Extension rule: 1. Only one of the five waves is extended, and the other two waves are similar in length and running time.

Wave extension or extension: the wave motion is enlarged or lengthened.

Predictive significance of wave extension:

① Predict the running length of the push wave. If the third wave is extended, the length and running time of the fifth wave and the first wave may be similar.

② When both the first wave and the third wave are simply rising waves, In the emerging stock market (or futures market), the five waves tend to extend.

④ The five waves may extend in the form of double retracement.

After the first retracement to the starting point of the extended wave, the price rises again. After the first retracement to the starting point of the extended wave, the price rises again. After the first retracement to the starting point of the extended wave, it begins to fall

5, and the characteristics of each wave

. It is a kind of bottom-building pattern. The first wave is the beginning of the cycle, and the short-selling market is not exhausted, and the buyer's power is not strong. In addition, the short-selling pressure continues to exist. Therefore, when the second wave of adjustment falls after the first wave of this kind, the range of its retracement is often deep; (2) The other half of the first wave appeared after the long-term consolidation. In this kind of first wave, its market rose by a large margin. Generally, the increase of the first wave is usually the shortest among the five waves. (3) During the formation process, the market was rich in funds, but the economy was still in recession, and the trading volume and market width increased significantly.

The second wave: the second wave was a downward wave, because investors mistakenly thought that the bear market was not over yet. Almost ate the increase of the first wave. When the price fell to the bottom (the starting point of the first wave) in this wave, the market was reluctant to sell, the selling pressure gradually exhausted, and the trading volume gradually decreased, and the second wave adjustment would come to an end. In this wave, the turning patterns in the chart often appeared, such as head, shoulders and bottom, double bottom, etc.

The third wave: The third wave is often the largest and most explosive (the price often jumps). It is often the longest, investors' confidence is restored, and the trading volume rises sharply. There are often breakthrough signals in traditional charts. This market trend is very intense, and some graphical barriers are easily worn out, especially when breaking through the high point of the first wave, which is the strongest buying signal. In addition, due to the fierce rise of the third wave, the phenomenon of "prolonging the wave" often appears.

The fourth wave: The fourth wave is a sharp rise in the market. The trend of "inclined triangle" often appears, but the bottom of the fourth wave will not be lower than the top of the first wave. During the formation process, high-priced stocks tend to fall back slightly, while low-priced stocks jump up and down sharply. < P > The fifth wave: in the stock market, the rise of the fifth wave is usually smaller than that of the third wave, and it often fails, with a slight extensiveness and strength, but the market sentiment is quite optimistic, and some analysts' "brave words" can often be heard. Everyone makes money. The original leader in the market has now retreated to the second line.

Wave A: Wave A is the beginning of the decline, but most investors think that the rising market has not been reversed, which is only a temporary phenomenon. In fact, the decline of Wave A usually has warning signals in the fifth wave, such as the deviation of trading volume from the price trend or technical indicators, but because the market is still optimistic at this time, Wave A sometimes appears platform adjustment.

Wave B. However, the trading volume is not large. Generally speaking, it is the escape line for bulls, but because most investors mistakenly think that it is an increase in another wave band, B wave often forms a "bull trap", and many investors are trapped here. B wave is rarely strong technically, and the number of stocks active in B wave is limited, but the blue-chip stocks are very resistant to falling.

C wave: It is a destructive falling wave with a relatively strong decline and a large decline. Moreover, there has been an overall decline.

The above wave characteristics are only suggestive, which does not mean that it is inevitable. The wave characteristics sometimes mislead investors and even delay fighters. Therefore, in the actual analysis work, the wave shape must prevail.

6. Promote various types of waves

In Eliot's wave theory, The wave type (5-3) determines whether it is a push wave or a correction wave. However, the shape of each wave is not exactly the same. In reality, the push wave will have some variation patterns due to different fundamentals. The variation patterns mainly include: "wave extension", "failed fifth wave" and "inclined triangle".

(1) standard push wave

.

(2) The third wave is excessively uplifted.

(4) The variation form of the push wave-inclined triangle is rare, which appears in the trend of rapid ascent or bottoming, which means that the consumptive ascent or descent returns to the starting point of the form after reversal, and the structure of the five waves is

7, and it is difficult to identify and divide the various forms of the adjustment wave

. Marked by A-B-C, it can be subdivided into a smaller level of 5-3-5. When a sawtooth pattern fails to achieve the normal goal, there will be two (at most three) sawtooth patterns in the market, that is, the so-called double sawtooth pattern or triple sawtooth pattern. (2) Platform pattern: 3-3-5, marked by A-B-C. Platform pattern is different from the previous one. Generally, it appears after the extended wave. Moreover, the stronger the market trend, the shorter the platform consolidation time. Irregular platform C falls below A or cannot reach A(3) triangle pattern: the only correction wave that runs with five waves, that is, 3-3-3-3. Eliot believes that triangle pattern will only appear in the fourth wave, B wave or X wave. There is little chance that the second wave will form a triangle pattern. When the triangle type is over, the push wave will often "surge". Its rising goal is probably the distance of the widest part of the triangle type. (4) Double triple or triple triple triple type: (5) When the market of wave variation is firm, B wave breaks through the starting point of A wave, whether it rebounds or reverses the sawtooth B wave with the variation of the pre-triangle 5-3-5-3-5, but does not climb to the starting point of A wave. The subsequent wave C did not fall below the abnormal top of the terminal point of wave A. If the fifth wave extends, occurs and ends within a larger wave (the fifth wave), then the upcoming adjustment wave will not be preceded by a rather abnormal small expansion platform.