NeoWave theory was developed by author and financial analyst Glenn Neely. It's an expansion of R.N. Elliott's ideas and concepts, with its own technique to analyze waves, aiming to reduce the subjectivity and perceived contradictions of the traditional Elliott Wave theory while at the same time aiming to improve its predictive power. NeoWave is a discipline in itself with many additional rules and requirements and with new corrective chart patterns such as the neutral triangle, the diametric formation, the 5th failure terminal and the 3rd Extension Terminal.
Time plays an important role in its logic: the time duration of pattern segments is used to determine whether or not a pattern has completed. According to the NeoWave logic, a pattern can not take too much or too little time (relative to other phases) to complete. Some traders combine NeoWave with other technical analysis techniques to try and find the best trades.
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