Waves are nested: each wave consists of smaller waves of a lower . That is why the analysis starts with the big picture and works its way down – month, week, day. On every level there is a , each with its own . Entry, stop and target only come into play on the smallest level.
Month: big picture and key fractal
Is the market impulsive or corrective in the long run? Look for the largest correction since the data began, the . Deep and sharp (over 50%) points more to wave 2, shallow or long more to wave 4. Our rule checks this on weekly candles: over 50% and at most 52 weeks → hypothesis wave 2.
Week and day: scenarios and harmony
On the week you count the subwaves: five or three? Waves of the same degree look alike in duration and length (); big differences point to another degree. The weekly count is supportive if the main scenario expects rising prices and the alternative does too – or is ruled out before the stop is reached (its invalidation level at or above the stop). It is now information only, not a criterion for the rule. This reading is still being checked.
Closing-price principle and judgment
Under the Elliott rules, a level only counts as broken with a close beyond it (). Our rule uses this for the invalidation level and its trigger; zone touch, high above wave 1 and stop count with the wick. Counting stays partly judgment; often several counts fit. The goal is the most plausible scenario, not “the right” count – and it is checked again with every new candle.