![]() The user may change only the strength value. ![]() The fractal indicator is often used in conjunction with the Alligator. Still, there are thousands of successful investors and traders that have managed to apply Elliott's principles in a profitable manner. Fractal is a technical indicator where, in a series of at least 5 bars, the highest high (or lowest low) is in the middle, and two lower highs (or higher lows) are on both sides. Not only because it requires practice, but also due to the high level of subjectivity involved.Īccordingly, critics argue that the Elliott Wave Theory isn't a legitimate theory due to its highly subjective nature, and relies on a loosely defined set of rules. ![]() This means that drawing the waves correctly is far from a simple task. In practice, the waves may be drawn in several ways, without necessarily breaking Elliot's rules. Some say that the success rate of the Elliott Wave principle is heavily dependent on the traders' ability to precisely divide the market movements into trends and corrections. There is an ongoing debate regarding the efficiency of the Elliott waves. In some cases, such a counter-trend struggle can also make Corrective Waves much harder to identify as they can vary significantly in length and complexity.Īccording to Prechter, the most important rule to keep in mind regarding Corrective Waves is that they are never made of five waves. When compared to Motive Waves, Corrective Waves tend to be smaller because they move against the bigger trend.
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