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Elliott Waves Alternance

When it comes to counting waves and forecasting the financial markets, Elliott wave traders do use the Elliott wave principle of alternance.  The principle of the Elliott wave alternance is one of the fundamental wave principles.  

This article will help one to use it more efficiently.
Let's get started.

Normal Waves Alternance Principle

The normal wave alternance principle relates to the alternance between the second and fourth waves.  When the 2nd wave is a three-structure (shallow) then there is a high chance that the fourth wave will be a five-structure (deep) and vice versa.  

So this is what the wave alternance principle is all about.  Another interpretation of that principle is that if the second wave takes a shorter time to be completed then there is a high chance that the fourth wave will take a longer time.  It is that simple, but it really helps to be ready.

Indeed many wave traders do not go further than that.  However, as one begins to ask why is it as it is, one will begin to make rational deductions. 

Understanding More The Waves Alternance Principle

One can rationally deduct that the alternance between two consecutive corrective waves is possible.  Agree or disagree?  I agree. 

So, one can argue that there could be an alternance between the 4th wave and corrective phase ( correction after the motive wave).  Right?
The corrective phase is the subsequent corrective wave to the fourth wave.

Well, it is happening already because 9 out 10, the 4th wave is shallow while the corrective phase is deep.  Note that there is a correlation between the second wave and corrective phase because wave traders do use the structure of the second wave to forecast the corrective phase.  

With that, it becomes clear that it also possible (I mean possible) that there is an alternance between 4th wave and the corrective phase.

Now, we also know that the waves alternance principle does not stop only on the lower degree, but it is also true on every degree.  Therefore, one will agree that there is an alternance between 2nd wave of a higher degree and 4th wave of the same higher degree.  Right?

We also know that the corrective phase of the lower degree is exactly the second wave of the immediate higher degree up.
Please do not be confused.

For example, the corrective phase of the hourly chart is the second wave of the daily chart.  Also the daily chart's corrective phase is the second wave of the monthly chart if the daily chart motive forms the monthly chart first wave.  I will not dwell on that because I do want to prolong this discussion. 

With the same rational deduction, one can say that there is an alternance between the 4th wave of a lower degree and second wave of the immediate higher degree.

I do not want one to dislike the wave principle, so I will not push it too deep.  I can make further deductions by connecting every dot between the lower degree and higher one.

The purpose of this discussion is to wake up the Elliott wave genius in traders so they begin to see further than what has been commonly taught so far.  As I said before, there are so many sub wave principles beneath the surface, and one can use them to forecast the markets when everybody is stuck.  

Obviously, one does not want to come up with irrational deductions or misuse the relevant ones. 

The alternance does occur between corrective waves on the same time frame, but also on different times frame.  It also occurs among minor corrective waves. 

For traders who already get what I already said.  One can quickly spot that there is alternance between the second minor wave of the first wave and second wave itself.  Stay with me please.  

There is also alternance between the second minor wave of the third wave and 4th wave itself.  Is it too much for you?

Let me help you out a bit because my mission at 24Elliottwaves.com is to simplify the wave principle without diluting it. 

Please note the following:
1/ Everyone knows that there is an alternance between 2nd and 4th waves.
2/ Only few know that there is alternance between the second minor wave of an impulse wave and the emmediate corrective wave.

Read those two sentences over and over until they really make sense to you.  Once you get it, you will never be the same again.  Yes, it will take a bit of time before one finally grasps to what extent one can use the waves alternance principle to forecast the financial markets more precisely.

Well, friends, this is the end of this topic.
I am always digging deeper into the Elliott wave rules to get the best out them. 
Please do not hesitate to post your relevant questions and comments at 24Elliottwaves YouTube channel and in due course, I will answer them.

Conclusion

If one is in the business of forecasting the financial markets more accurately, one must learn to master the waves alternance principle.  It does really help to see behind the curtain when things are not very clear to others.   


Thank you for reading.  I enjoy writing this article and I hope it is useful to you.  If yes, please share and bookmark it.  I will appreciate it if you can say few good words about us in your favourite Elliott wave trading

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I wish you the very best.

Happy Trading To All


This article is writing by 

George Beaulieu

founder of 24Elliottwaves.com website.