One that recognises the correlation between a lower degree Elliott wave cycle and the subsequent higher degree cycle can avoid jumping in the boiling water of the financial markets because he or she can patiently enter the markets without too many sleepless nights.
One that also knows that a new cycle has just started will be adding more new positions in a timely fashion instead of leaving so much cash littered on the table.
On the other hand, one will become very cautious as a cycle is about to end contrary to many courageous crazy investors.
Please allow me to say that one that really masters cycles or Elliott cycles holds the key to profitable trading and investing.
Furthermore, the Elliott wave cycles allow one to navigate the financial markets more peaceful like a soldier who knows where are all the enemy's traps.
Each healthy Elliott wave cycle is formed of three mini cycles.
Usually, some Elliott wave practitioners do disagree with me on that point.
That is normal, and it is OK by me. However, I am shamelessly sticking to my findings because it all adds up nicely.
The first mini cycle is formed of the 1st and second waves.
The second mini cycle is formed of the third and 4th waves.
The third mini cycle is formed of the 5th wave and first leg of the correction (not the whole correction).
Usually, the first leg of the correction will break the trend line of the motive wave or 5th wave's common sense trend line.
The continuation of the correction beyond that first leg is due to the correction of the whole motive wave.
Please understand that each impulse or motive wave must be corrected. Right?
Therefore, the 2nd wave is correcting the 1st wave and the 4th wave is correcting the third wave. Now what is correcting the fifth wave?
It is not the whole corrective phase, but that first leg of the correction. There is one more impulse wave or motive wave. What is that?
It is the motive itself from the 1st wave to 5th wave. Right? Well, that also must be corrected. Yes or no?
You are correct, yes. The largest part of the whole correction after that first leg is correcting the trending phase or motive wave.
At this point, one understands why I call myself an eagle-eye Elliott wave trader. That is also the reason why though my fellow Elliott wave traders find it hard to agree me that a normal Elliott wave cycle is composed of three mini Elliott wave cycles I still stick to my initial observations.
Are they disagreeing too quickly? Please do not answer that question yet.
Hopefully, by this point, one is having a better understanding of the Elliott wave cycle.
Have you been wondering how I discovered all these things? Well, it is just when I like something, and I really want to understand it, I will just make a firm decision, and not rest till I have a clear understanding.
Really, the key is the willingness to understand, to understand more and understand clearly.
Therefore, If one really likes the Elliott wave principle, one should not just stand at the first open door like everyone else, but keep finding out more and more without stop.
Before we wrap it, I want to touch upon how one can connect a specific lower degree wave cycle to its daddy higher degree cycle.