# HOW TO DRAW ELLIOT WAVE PATTERN

FX:EURUSD   Euro / U.S. Dollar
Although this is not a perfect Elliot wave pattern, it is a very good example of how to draw and how Elliot wave should be.

Basically Elliot wave pattern has two components, the Trendy component and the Correction component. Trendy has waves 1 to 5 while Correction has waves A to C.

X is the starting point to count as in the zero point and the beginning of the Trendy part if it holds.

Wave 1 is the next and a continuation and end from the start. therefore from X to 1 is known as wave 1. it must be used to decipher wave 2 and is the beginning of the market trend so to say if it holds.

Wave 2 is the second wave emanating from wave 1 and ends as 61.8% retracement of wave 1. considered as a pullback for trend continuation. if it fails and go above the beginning of wave 1 which is X, the count is broken and you gotta start again. from its end is the beginning of wave 3. therefore from 1 to 2 is regarded as wave 2.

Wave 3 is the continuation of the market trend which started from wave X and wave 3 sprouts from the 61.8% retracement of wave 1 (that retracment as a pullback is wave 2). Wave 3 is also the longest wave and if caught perfectly has the maximum profit. some say it should be 161.8% retracement of wave 1, some say it could be 200% or up to 261.8%, but i say all of what they say and adds that it could be longer than 261.8%. but in this chart it should have been 161.8% retracement but it went into something called wave 3 extension, and therefore a 1.272% extension taking from wave 1 to the 161.8% extension. dont always mistaken a fall pullback as the end of wave 3. wave 3 is the longest of all the waves in the Elliot pattern.

Wave 4 is the forth wave and also like wave 2 a pullback before final trend continuation. but wave 4 should not exceed or touch wave 1. ideally it should be a 38.2% retracement of wave 3. and the same thing in the chart.

Wave 5 this is the final continuation of the trend from whence the trend is likely to reverse or change course. wave 5 ideally starts from the 38.2% retracement of wave 3 and completes at 1.272% extension of wave 3. it is also the follower in terms of length after the almighty wave 3. some say it should be same length or almost as wave 1, but i say it could be abit longer than wave 1 but not as long as wave 3. it could also have wave 3 extension as does wave 5 even as in this chart. but be careful while counting them.

after the wave five as the fine trending wave, the correction waves come into play. which are a b c corrections.

Wave A starts from the 1.272% extension of wave 3 which wave 5 should complete. it could be as high as possible even up to or above wave 4. from there is a pullback called wave b

Wave B is a small pullback just like waves 2 and 4 before continuation of the correction in a new trend opposite that of the waves 1 - 5. it ends with wave c correction. it must be atleast 38.2% retracement from wave 5 so it could have an ABCD pattern where leg AB equals or almost leg CD ( ab=cd pattern or XABCD pattern).

Wave C is the final correction wave from wave b. it could be an extension of up to 261.8% of wave b from end of wave a. just to complete the harmonic wave pattern of XABCD.

from here the market should make a different trend or continues on the trend or could be in a good consolidation area before it finally makes a decision on which trend to follow.

however this is how to draw or count Elliot wave pattern

hope DT is aware of this piece.

thanks to you all

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