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Second Elliott Wave Rules
This article is about the Elliott wave rules relating to the second Elliott
wave. In the end of this article, one will have a better understanding of
the second Elliott wave rules.
One will also know why the second Elliott wave is the most important wave. Without keeping you waiting any longer, let's get right into it.
Why Second Wave Is The Most Important Elliott Wave?
It is fair to say that both the motive wave (trend) and correction after
the trend depends on the second wave. The second wave is the corner stone of an Elliott wave cycle.
the trend depends on the second wave. The second wave is the corner stone of an Elliott wave cycle.
That is why professional Elliott wave traders do spend a lot of time scrutinising the structure of the second wave.
One thing is certain is that without a valid (acceptable) second wave, there will be no third wave. Please hold your thoughts for now, and do not get too irritated.
Furthermore, the validation of the first wave depends on a true
second wave that does not violate any Elliott wave rules. One may argue and say:
"hold on a second George, without a true first wave there will be no second wave"
Yes, that is a fair statement.
However, one will not even talk about Elliott wave count or analysis if there is no valid first wave. I mean if one begins to talk about
Elliott wave analysis, the most important wave is the 2nd wave.
One thing is certain is that without a valid (acceptable) second wave, there will be no third wave. Please hold your thoughts for now, and do not get too irritated.
Furthermore, the validation of the first wave depends on a true
second wave that does not violate any Elliott wave rules. One may argue and say:
"hold on a second George, without a true first wave there will be no second wave"
Yes, that is a fair statement.
However, one will not even talk about Elliott wave count or analysis if there is no valid first wave. I mean if one begins to talk about
Elliott wave analysis, the most important wave is the 2nd wave.
As I said before, the best Elliott wave traders are those that have mastered the corrective waves. Are you struggling with your wave analysis? Well, go back and focus on mastering the corrective Elliott waves, and I bet you will not regret it.
The structure of the second wave often helps to predict the correction after the trend. It also helps to have a bit of idea how deep and shallow will the 4th wave be.
The structure of the second wave often helps to predict the correction after the trend. It also helps to have a bit of idea how deep and shallow will the 4th wave be.
Moreover, whether the 4th wave will take a shorter or longer time. When the second wave cancels the first wave, that is it friends and foes, everything goes back to zero. One must restart counting waves. That is the power of the second wave. All change, all change just because the second wave has cancelled the 1st wave.
May be one is thinking that I am exaggerating a bit. That is fine.
Imagine that one has spent a lot time to conduct a thorough Elliott wave count on the monthly chart. One has counted five distinctive waves
without any Elliott wave rules being broken. Those five waves (motive/trend) will form the first wave of a higher degree. All good?
What would happen if the second wave of the higher degree (yearly chart) cancels that higher degree 1st wave? Will that first wave of the higher degree survive if it is followed by a second
higher degree wave that is not genuine? Of course not.
There will not be a third wave of the higher degree either. All I am barking about is that the second wave of any degree can help wave traders to understand more what is happening or likely to occur. I mean that, it is essential to monitor all second waves of every degree
to get the full picture.
May be one is thinking that I am exaggerating a bit. That is fine.
Imagine that one has spent a lot time to conduct a thorough Elliott wave count on the monthly chart. One has counted five distinctive waves
without any Elliott wave rules being broken. Those five waves (motive/trend) will form the first wave of a higher degree. All good?
What would happen if the second wave of the higher degree (yearly chart) cancels that higher degree 1st wave? Will that first wave of the higher degree survive if it is followed by a second
higher degree wave that is not genuine? Of course not.
There will not be a third wave of the higher degree either. All I am barking about is that the second wave of any degree can help wave traders to understand more what is happening or likely to occur. I mean that, it is essential to monitor all second waves of every degree
to get the full picture.
Wouldn't that be helpful? I think it is. That is all.
It is also true that if the second wave influences both the 4th wave and correction after the trend, it will surely have an impact on the fifth wave too. In my opinion, those are the reasons why the second wave is
the corner stone of an Elliott wave cycle.
It is also true that if the second wave influences both the 4th wave and correction after the trend, it will surely have an impact on the fifth wave too. In my opinion, those are the reasons why the second wave is
the corner stone of an Elliott wave cycle.
Rules Relating To Second Elliott Wave
The first second wave rule stipulates that the second wave should not close at the starting point of the first wave. That means it should not cancel the first wave. Note that the attention is on the closing price
of the second wave.
Sometimes, a second wave's candlestick bar may go beyond the starting point of the first wave (its last candlestick closing price),
but will close at a point where the second wave will not cancel the first wave. Do not worry too quickly, we will be looking into those on 24Elliottwaves channel.
of the second wave.
Sometimes, a second wave's candlestick bar may go beyond the starting point of the first wave (its last candlestick closing price),
but will close at a point where the second wave will not cancel the first wave. Do not worry too quickly, we will be looking into those on 24Elliottwaves channel.
Though, some can call it a cancellation, many will take it as a valid second wave by judging from the closing price instead of the high or
low of the second wave. Personally, I would say that if one is not satisfied with it then one should not accept it as a valid second wave for one's own conscience.
low of the second wave. Personally, I would say that if one is not satisfied with it then one should not accept it as a valid second wave for one's own conscience.
At the same time, one is free to call it a valid second wave with a question mark. In that instance, one can continue, but only with a caution.
Another second wave rule is the alternance between the fourth and second waves. I recommend that Elliott traders check out my unique article on the wave alternance principle. I will not say more.
The third rule relating to the second wave is that the structure of the second wave is usually the predictive fractal pattern of the correction phase after the trend.
Another second wave rule is the alternance between the fourth and second waves. I recommend that Elliott traders check out my unique article on the wave alternance principle. I will not say more.
The third rule relating to the second wave is that the structure of the second wave is usually the predictive fractal pattern of the correction phase after the trend.
Truly, one can use the second wave structure to predict the corrective phase. I already posted few videos on that essential rule that allows an Elliott wave practitioner to forecast the corrective phase using the second wave structures.
Though that is not an exact science, it is possible to forecast the correction with precision. Call it an advanced Elliott wave forecast as
one is effectively combining the Elliott wave forecast with the predictive fractal patterns of Mr Benoit Mandelbrot.
I would like to point out also that there are only few Elliott wave analysts who understand exactly how this is done. Surely, in due course I will post an article about it.
Finally, note that, from every Elliott wave rule, one can rationally deduct other sub principles that will help one to use the Elliott wave principle like a master. I have already being talking about the sub principles from rational deductions for a while. I have written few articles on those
sub wave principles that are not part of the common teaching so far.
one is effectively combining the Elliott wave forecast with the predictive fractal patterns of Mr Benoit Mandelbrot.
I would like to point out also that there are only few Elliott wave analysts who understand exactly how this is done. Surely, in due course I will post an article about it.
Finally, note that, from every Elliott wave rule, one can rationally deduct other sub principles that will help one to use the Elliott wave principle like a master. I have already being talking about the sub principles from rational deductions for a while. I have written few articles on those
sub wave principles that are not part of the common teaching so far.
Conclusion
The second wave's rule is the key to mastering the corrective waves and improve the Elliott wave trading and forecast.
When an Elliott wave trader or analyst begins to use those rules more effectively, he or she will boost both the Elliott wave count and forecast strategies.
The second wave's rules also open the door to the discovery of other sub wave principles that are not commonly known to others.
It does not matter whether it is a lower or higher degree second wave, those rules are still in force. If one wants to use the Elliott wave principle as an effective guide, one must master the second Elliott wave rules.
That will do traders. I am pleased that I have finally shared my thoughts on the second Ellliott wave rules. I hope one will find them beneficial. If that is the case, please share and bookmark this article
today. I will really appreciate it. Thank you for reading.
Please do not hesitate to post relevant questions and comments at 24Elliottwaves YouTube channel, and in due
course I will get back to you.
I wish you the very best.
Happy Trading to all.
This article is written by
George Beaulieu
founder of https://www.24Elliottwaves.com website.
It does not matter whether it is a lower or higher degree second wave, those rules are still in force. If one wants to use the Elliott wave principle as an effective guide, one must master the second Elliott wave rules.
That will do traders. I am pleased that I have finally shared my thoughts on the second Ellliott wave rules. I hope one will find them beneficial. If that is the case, please share and bookmark this article
today. I will really appreciate it. Thank you for reading.
Please do not hesitate to post relevant questions and comments at 24Elliottwaves YouTube channel, and in due
course I will get back to you.
I wish you the very best.
Happy Trading to all.
This article is written by
George Beaulieu
founder of https://www.24Elliottwaves.com website.