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Thread: 121 pattern and Elliot Wave theory

  1. #1
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    121 pattern and Elliot Wave theory

    121 pattern matches perfectly with the Running Corrections concept and Elliott Wave theory. XA swing would be labeled as wave1 and ABCD would be the Running Correction (in case of 121 reversal pattern scenario). Both harmonic and Elliott Wave traders try to catch the strongest wave 3 or at minimum wave C.



    121 pattern and Elliot Wave theory-121-pattern-location-elliott-wave-fractal-tradingarsenal-dot-com.jpg

    For more info about 121 / One2One pattern and the confirmation methods see -> 121 - table of content
    Last edited by Admin; 08-08-2012 at 02:43 PM. Reason: 121 pattern and Elliot Wave theory - Updated

  2. #2
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    good location of the 121 pattern from Elliott Wave Theory perspective:
    121 pattern and Elliot Wave theory-harmonic-trading-121-bullish-chfjpy-m15-2012-04-25_1804.png

  3. #3
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    121 pattern internal structure
    When we talk about 121 pattern (in context of the Elliott Wave Theory) we talk about flat correction (in case of Gartley pattern it was zigzag correction -> Gartley pattern and Elliot Wave theory).


    121 pattern and Elliot Wave theory-flat-corrections-tradingarsenal-dot-com.jpg

    A flat correction differs from a zigzag. Flat subdivides into 3-3-5 subwaves, whereas zigzag subdivides into 5-3-5 waves.
    The following diagram presents 3 types of the flat correction: simple, expanded and running. Their internal structure is the same, but location of points B and C is different. Type #3 is the running flat correction that appears in the 121 pattern.

    "Flat corrections usually retrace less of preceding impulse waves than do zigzags. They participate in periods involving a strong larger trend and thus virtually always precede or follow extensions. The more powerful the underlying trend, the briefer the flat tends to be. Within impulses, fourth waves frequently sport flats, while second waves rarely do."
    ...
    In a rare variation on the 3-3-5 pattern, which we call a running flat, wave B terminates well beyond the beginning of wave A as in an expanded flat, but wave C fails to travel its full distance, falling short of the level at which wave A ended. There are hardly any examples of this type of correction in the price record." - Elliott Wave International: Expert Market Forecasting using the Elliott Wave Principle


    Based on this theory we should look for the following internal 121 pattern structures (1 case only, comparing to 4 cases for the Gartley pattern):
    Case1


    121 pattern and Elliot Wave theory-121-pattern-internal-structure-tradingarsenal-dot-com.jpg

    Note: This is very interesting part (especially "There are hardly any examples of this type of correction in the price record."). Would be great to have some Elliotticians to comment on it and explain, thanks!:
    "In a rare variation on the 3-3-5 pattern, which we call a running flat, wave B terminates well beyond the beginning of wave A as in an expanded flat, but wave C fails to travel its full distance, falling short of the level at which wave A ended, as in Figures 1-38 through 1-41. Apparently in this case, the forces in the direction of the larger trend are so powerful that the pattern becomes skewed in that direction. It is always important, but particularly when concluding that a running flat has taken place, that the internal subdivisions adhere to Elliott's rules. If the supposed B wave, for instance, breaks down into five waves rather than three, it is more likely the first wave up of the impulse of next higher degree. The power of adjacent impulse waves is important in recognizing running corrections, which tend to occur only in strong and fast markets. We must issue a warning, however. There are hardly any examples of this type of correction in the price record. Never label a correction prematurely this way, or you'll find yourself wrong nine times out of ten. Running triangles, in contrast, are much more common" - Elliott Wave International - Expert Financial Market Forecasting

    Note: more on Elliott Wave theory and especially on Correction types can be found on Elliott Wave International: Expert Market Forecasting using the Elliott Wave Principle
    Last edited by Admin; 08-08-2012 at 02:43 PM. Reason: 121 pattern and Elliot Wave theory - Updated

  4. #4
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    Last edited by kor4x; 08-15-2012 at 04:53 PM.

  5. #5
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    is it ew+[ab=cd]
    thanks

  6. #6
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    is it automatic Elliott Wave indicator?

  7. #7
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    no self prepared

  8. #8
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    You gonna start incorporating Ellie wave in AMP ?

  9. #9
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    You gonna start incorporating Ellie wave in AMP ?
    very unlikely. Only some very little elements of this thory that are used to confirm the optimal entry.
    Zerit0 likes this.

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