Elliot waves are meeting standard definition of fractals. They are self similar and can be found on any price timeframe. Price movement in forex is based on investors' psychology on every timeframe. This creates typical wave structure of impulsive and corrective swings on any timeframe.
Every Elliot wave can therefore be broke down to partial waves. Each one of them, can be further broken down to another waves, creating inherent fractal (self similar) nature of Elliot waves.
To be able to better distinguish between waves in different timeframes Elliot suggested naming them:
Grand supercycle consists of supercycle waves. Each separate grand supercycle wave can be broken down to 5 supercycle waves.
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Each of the cycles can be broken down to its building blocks – smaller cycles.
Considering that supercycle spreads over centuries most traders will use daily wave (minute) and hourly (minuette) for their trading. Regardless of the Elliot wave size and timeframe, Elliot wave principle and fractal geometry remains the same.
In forex market, Elliot waves are rarely perfectly shaped and are not always easy to identify.
Traders utilizing Elliot waves heavily rely on charting analysis and pattern recognition. Recognising them in the price movement, as anything on forex takes time and practice. Elliots waves are however worth spending time to learn.
There are three basic rules that will help you to recognize them at the beginning.
Wave number 3 can never be the shortest impulsive wave.
Wave 2 cannot immediately follow wave number 1.
Wave 4 cannot touch the price reached by wave 1.
Tips (not rules) for identifying Elliot waves.
In some cases wave number two will not surpass high/low reached by wave number 3.
Wave 5 often punches through upper trendline (resistance) in uptrend, and support in downtrend.
Wave 3 tends to be very long and steady.
Wave number 2 and 4 (correctional waves) often times follow Fibonacci numbers.