Elliott Wave Analysis Quiz

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Questions and Answers

What type of wave is characterized by a strong move in the direction of the main trend, with five waves that subdivide into five waves of lesser degree?

  • Motive Wave
  • Corrective Wave
  • Impulse Wave (correct)
  • Extension Wave

What is the primary purpose of labeling in Elliott Wave analysis?

  • To determine the degree of the wave (correct)
  • To identify corrective waves
  • To create a Fibonacci sequence
  • To identify motive waves

What is a characteristic of a zig-zag corrective wave?

  • It has five waves that subdivide into three waves of lesser degree
  • It has three waves that subdivide into five waves of lesser degree
  • It has three waves that subdivide into three waves of lesser degree (correct)
  • It has five waves that subdivide into five waves of lesser degree

What is the Fibonacci ratio of the first retracement in an impulse wave?

<p>0.382 (A)</p>
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What is the term for a corrective wave that combines two or three simple corrective waves?

<p>Combination (B)</p>
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What is the term for a motive wave that extends beyond the termination point of the preceding wave?

<p>Extension (C)</p>
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What is the typical net retracement percentage for a Zig-zag corrective wave?

<p>50-79 (D)</p>
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What is the purpose of using Fibonacci ratios in Elliott Wave analysis?

<p>To predict retracement levels (A)</p>
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What type of wave is characterized by a net retracement percentage of 10-40?

<p>Running Triangle (B)</p>
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What is the term for a corrective wave that has three waves, with the second wave being a zig-zag?

<p>Triple Three (C)</p>
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What is the primary difference between a Zig-zag and a Triangle corrective wave?

<p>Wave structure (C)</p>
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What is the characteristic of a triangle corrective wave?

<p>It has five waves that are all of approximately equal length (C)</p>
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What is the term for a corrective wave that has three waves, with the second wave being a flat?

<p>Double Three (D)</p>
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What is the term for the combination of two or more corrective waves?

<p>Combination (D)</p>
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What is the purpose of using Dividers in Elliott Wave analysis?

<p>To divide the price action into smaller segments (D)</p>
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What is the primary focus of Behavioral Elliott Wave analysis?

<p>Understanding market psychology (A)</p>
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What is the term for the complete Elliott Wave pattern?

<p>Grand Supercycle (D)</p>
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What is the primary characteristic of an Impulse Wave?

<p>Five-wave structure (B)</p>
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What is the term for a corrective wave that moves in the opposite direction of the main trend?

<p>Counter-trend (A)</p>
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What is the primary goal of Trading Elliott Wave?

<p>Predicting price movements (B)</p>
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What is the typical net retracement percentage for a Triangle corrective wave?

<p>38-50 (A)</p>
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What is the term for a corrective wave that combines two or three simple corrective waves?

<p>Combination (A)</p>
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What is the characteristic of a Triangle corrective wave?

<p>A net retracement percentage of 38-50 (D)</p>
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What is the primary focus of Behavioral Elliott Wave analysis?

<p>Understanding the psychology of market participants (A)</p>
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What is the characteristic of a Running Triangle corrective wave?

<p>A net retracement percentage of 10-40 (C)</p>
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What is the term for a motive wave that extends beyond the termination point of the preceding wave?

<p>Extension (C)</p>
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What is the primary purpose of using Dividers in Elliott Wave analysis?

<p>To highlight key levels of support and resistance (D)</p>
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What is the term for a corrective wave that has three waves, with the second wave being a flat?

<p>Complex (A)</p>
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What is the primary goal of Trading Elliott Wave?

<p>To predict the direction of future price movements (C)</p>
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What type of wave is characterized by a strong move in the direction of the main trend, with five waves that subdivide into three waves of lesser degree?

<p>Impulse wave (D)</p>
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What is the purpose of labeling in Elliott Wave analysis, besides identifying the degree of the wave?

<p>To identify the motive or corrective nature of the wave (B)</p>
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What is the characteristic of a zig-zag corrective wave, besides having three waves?

<p>The second wave is a zig-zag (C)</p>
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What is the Fibonacci ratio of the third retracement in an impulse wave?

<p>0.236 (D)</p>
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What is the term for a corrective wave that combines two or more corrective waves?

<p>Complex correction (D)</p>
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What is the term for a motive wave that extends beyond the termination point of the preceding wave?

<p>Extension (B)</p>
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What is the purpose of using Fibonacci ratios in Elliott Wave analysis, besides identifying retracement levels?

<p>To calculate the magnitude of the wave (C)</p>
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What is the typical net retracement percentage for a Flat corrective wave?

<p>40-60% (C)</p>
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What is the term for a corrective wave that has three waves, with the second wave being a flat?

<p>Expanded flat (A)</p>
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What is the primary characteristic of a Triangle corrective wave?

<p>It has three waves, with the second wave being a zig-zag (D)</p>
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Flashcards

Elliott Wave Analysis

A technical analysis method identifying patterns in price movements.

Labeling (Elliott Wave)

The process of designating waves as either motive (trending) or corrective (counter-trending).

Motive Waves

Waves that move in the direction of the main trend.

Types of Motive Waves

Impulsive waves in the direction of the main trend including impulse, extension and truncation.

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Extensions (Elliott Wave)

Occurs when the third wave is the longest in the motive wave pattern.

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Truncation (Elliott Wave)

Occurs when the fifth wave is shorter than the third wave.

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Corrective Waves

Waves that move against the primary trend.

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Zig-Zag

A corrective wave with three legs, each moving in the opposite direction.

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Flat

A corrective wave with three legs, each moving in the same direction.

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Triangle (Elliott Wave)

A corrective wave with five legs, each moving in alternating directions.

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Double/Triple Zig-Zag

Complex correction of multiple Zig-Zag patterns.

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Combination (Elliott Wave)

A corrective wave combining two or more corrective patterns.

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Fibonacci (Elliott Wave)

Mathematical ratio (~1.618) used to identify retracement/extension levels.

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Fibonacci Ratios

Used to calculate retracement levels, common ratios include 0.618, 0.382, 0.236, and 0.146.

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Retracements (Impulse Waves)

They often retrace to the 23.6% or 38.2% Fibonacci level.

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Retracements (Corrective Waves)

Specific retracement levels including 50-79% for Zig-Zag, 38-50% for Triangle, and 38-79% for Flat.

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Multiples – Impulse Waves

Impulse Waves can extend to multiples of the Fibonacci ratio, such as 1.618 or 2.618.

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Multiples – Corrective Waves

Corrective Waves can also extend to multiples of the Fibonacci ratio.

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Dividers (Elliott Wave)

Used to separate and identify different wave patterns.

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Trading Elliott Wave

Requires identifying the current wave pattern and anticipating the next wave.

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Behavioral (Elliott Wave)

Understanding market psychology and sentiment.

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Study Notes

Elliott Wave Analysis

  • Elliott Wave Analysis is a method of technical analysis that identifies patterns in price movements.

Labeling

  • Labeling is an essential part of Elliott Wave Analysis, where waves are labeled as either motive or corrective.

Motive Waves

  • Motive Waves are impulsive waves that move in the direction of the main trend.
  • There are three types of motive waves: impulse, extension, and truncation.

Extensions

  • Extensions occur when the third wave is the longest wave in the motive wave pattern.
  • Extensions can be normal, running, or overlapping.

Truncation

  • Truncation occurs when the fifth wave is shorter than the third wave in the motive wave pattern.

Corrective Waves

  • Corrective Waves are countertrend waves that move against the main trend.
  • There are four types of corrective waves: zig-zag, flat, triangle, and combination.

Zig-Zag

  • A Zig-Zag is a corrective wave that has three legs, with each leg moving in the opposite direction.

Flat

  • A Flat is a corrective wave that has three legs, with each leg moving in the same direction.

Triangles

  • A Triangle is a corrective wave that has five legs, with each leg moving in an alternating direction.

Double and Triple Zig-Zag

  • A Double or Triple Zig-Zag is a corrective wave that has multiple zig-zag patterns.

Combination (Double Three, Triple Three)

  • A Combination is a corrective wave that combines two or more corrective wave patterns.

Fibonacci

  • Fibonacci is a mathematical ratio used in Elliott Wave Analysis to identify retracement and extension levels.
  • The Fibonacci ratio is approximately 1.618.

Fibonacci Ratios

  • Fibonacci ratios are used to calculate retracement levels, with common ratios including 0.618, 0.382, 0.236, and 0.146.

Retracements – Impulse Waves

  • Impulse Waves often retrace to the 23.6% or 38.2% Fibonacci level.

Retracements – Corrective Waves

  • Corrective Waves have specific retracement levels, including 50-79% for Zig-Zag, 38-50% for Triangle, and 38-79% for Flat.

Multiples – Impulse Waves

  • Impulse Waves can extend to multiples of the Fibonacci ratio, such as 1.618 or 2.618.

Multiples – Corrective Waves

  • Corrective Waves can also extend to multiples of the Fibonacci ratio.

Dividers

  • Dividers are used to separate and identify different wave patterns.

Trading Elliott Wave

  • Trading with Elliott Wave Analysis requires identifying the current wave pattern and anticipating the next wave.

Behavioral

  • Behavioral aspects of Elliott Wave Analysis include understanding market psychology and sentiment.

Elliott Wave Analysis

  • Elliott Wave Analysis is a method of technical analysis that identifies patterns in price movements.

Labeling

  • Labeling is an essential part of Elliott Wave Analysis, where waves are labeled as either motive or corrective.

Motive Waves

  • Motive Waves are impulsive waves that move in the direction of the main trend.
  • There are three types of motive waves: impulse, extension, and truncation.

Extensions

  • Extensions occur when the third wave is the longest wave in the motive wave pattern.
  • Extensions can be normal, running, or overlapping.

Truncation

  • Truncation occurs when the fifth wave is shorter than the third wave in the motive wave pattern.

Corrective Waves

  • Corrective Waves are countertrend waves that move against the main trend.
  • There are four types of corrective waves: zig-zag, flat, triangle, and combination.

Zig-Zag

  • A Zig-Zag is a corrective wave that has three legs, with each leg moving in the opposite direction.

Flat

  • A Flat is a corrective wave that has three legs, with each leg moving in the same direction.

Triangles

  • A Triangle is a corrective wave that has five legs, with each leg moving in an alternating direction.

Double and Triple Zig-Zag

  • A Double or Triple Zig-Zag is a corrective wave that has multiple zig-zag patterns.

Combination (Double Three, Triple Three)

  • A Combination is a corrective wave that combines two or more corrective wave patterns.

Fibonacci

  • Fibonacci is a mathematical ratio used in Elliott Wave Analysis to identify retracement and extension levels.
  • The Fibonacci ratio is approximately 1.618.

Fibonacci Ratios

  • Fibonacci ratios are used to calculate retracement levels, with common ratios including 0.618, 0.382, 0.236, and 0.146.

Retracements – Impulse Waves

  • Impulse Waves often retrace to the 23.6% or 38.2% Fibonacci level.

Retracements – Corrective Waves

  • Corrective Waves have specific retracement levels, including 50-79% for Zig-Zag, 38-50% for Triangle, and 38-79% for Flat.

Multiples – Impulse Waves

  • Impulse Waves can extend to multiples of the Fibonacci ratio, such as 1.618 or 2.618.

Multiples – Corrective Waves

  • Corrective Waves can also extend to multiples of the Fibonacci ratio.

Dividers

  • Dividers are used to separate and identify different wave patterns.

Trading Elliott Wave

  • Trading with Elliott Wave Analysis requires identifying the current wave pattern and anticipating the next wave.

Behavioral

  • Behavioral aspects of Elliott Wave Analysis include understanding market psychology and sentiment.

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