Neo Wave: Advanced Elliott wave concepts

Neo Wave: Advanced Elliott wave concepts

By Waves Strategy Advisors (www.wavesstrategy.com)

Neo wave by Glen Neely is an advanced part of Elliott wave. In a simple Elliott wave there are only 3 basic rules:

1.       Wave 3 cannot be the shortest of wave 1, 3 and 5

2.       Wave 4 cannot overlap with any part of wave 1

3.       Wave 2 cannot retrace 100% of wave 1

However by using above rules for impulsive structure there is couple of probable scenarios always running. Neo wave has many rules to define a simple impulse pattern which are very rare. This tends to reduce the subjectivity and provide objectively the most probable scenario that can occur. Following are a few important rules that Neo wave gives

“Rules for Impulsive Waves”

1.       An impulse wave consists of 5 waves with wave 1, 3 and 5 traveling in direction of the impulse and wave 2 and wave 4 correcting the preceding wave

2.       Wave 3 cannot be the shortest of wave 1,3 and 5

3.       No part of wave 3 can break the 0 – 2 line

4.       No point of wave 5 can break the 2-4 line

5.       Touch point rule: Out of 6 points in impulsive wave not more than 4 points should lie on the channel.

6.       Rule of Equality: The rule of equality states that two unextended waves should tend towards equality in price / time.

7.       Overlap rule: No part of wave 4 can fall into the price range covered by wave 2

8.       Extension Rule: The longest wave should be atleast 1.618 times the next longest wave in terms of price.

9.       Rule of Alternation: Wave 2 and wave 4 should alternate in as much ways as possible – Price, Time, Severity, Intricacy, Construction

There is more to it. Learn systematic way of trading and trade only high probable setups by applying Advanced technical concepts. Write to us on helpdesk@wavesstrategy.com for more information or visit  www.wavesstrategy.com