How to Read the Market Using Elliott Wave Theory (Practical Examples)

[00:01] name is Sergey, this is the Ikiga channel. And in this video, the most complex type of analysis is presented in the video, the most complex type of analysis is presented in the simplest language. I will show you some of the secrets that I use in conducting the most effective and

[00:17] mathematically accurate method of analysis called the Wave Principle. Many people want to master the wave principle , but unfortunately, not many succeed, since the wave principle, as I have already said earlier,

[00:32] is the most difficult type of analysis to master. And so, with this and future videos, I want to give you some simple workflows that

[00:46] will allow you to master it and use it effectively. In this video, I'll do what many people have asked me to do in the comments:

[00:58] conduct a wave analysis of an asset from scratch, and at the same time, talk about how to from scratch, and at the same time, talk about how to

[01:11] the wave principle is the most accurate market map, which works by the method of elimination. That is, there is a certain set of structures with their own specific

[01:23] mathematical rules and norms that must be observed. And if something is not observed, then either it is not the structure we think about, or the structure breaks down, or becomes more complex. In previous training videos, I have given you a

[01:38] specific set of structures that are present in the market. In this video, of course, I will not voice them all . I assume you already know them. If you don't know, I've prepared guides especially for you that you can

[01:55] download. These are the first versions of our guides on the wave principle. Here are all the structures with all the rules and regulations that are present in the market. When conducting wave analysis, if you haven't mastered it yet, you

[02:10] analysis, if you haven't mastered it yet, you should definitely use guides. So, let's get started. Here is the chart of the Salan cryptocurrency. Daily timeframe. And the first thing to remember is that if we conduct a

[02:25] wave analysis of any asset, we need to start with higher we need to start with higher timeframes. This is a daily, weekly or monthly time frame depending on how long the

[02:39] asset has a history. Salana doesn't have a very long history, so the daily timeframe can be used. Next, we need to find the movement structures. These are the

[02:51] structures that drive the trend. There are only two movement structures. This is only two movement structures. This is an impulse, that is, this kind of movement, and a diagonal, which is formed in rarer cases than an impulse. There are

[03:07] no other movement structures on the market . Accordingly, if an asset is constantly growing, like, for example, Bitcoin or the Salana that we just opened, then we first need to find the structure of the impulse movement, this

[03:23] find the structure of the impulse movement, this structure on the left. And to do this, we need to know how to do it most simply and effectively . So, the structure of the movement is

[03:35] easiest to determine by the most common correction structures, common correction structures, namely zigzags and triangles. Accordingly, first of all we need to find these structures within the

[03:51] impulse. Let me remind you what zigzags look like. Zigzag is a movement like this. And a triangle is, of course, just such a movement.

[04:03] The triangle is the most obvious structure of the Wave Principle. Therefore, it is this structure that I recommend structure that I recommend focusing on the most. Knowing

[04:16] where a triangle can form , we can use the triangle to determine the structure of the highest degree. that is, the structure in which this triangle was formed. To do this, we need to look at the guide to

[04:31] correction structures. Let's find a triangle here and see where it triangle here and see where it can form. This is the given place. And pay attention to the fact that the triangle itself in an impulse can

[04:46] itself in an impulse can only be the fourth wave of this only be the fourth wave of this impulse. All other places below are correction structures. Alternatively, a triangle can form in

[04:59] combination within wave 2, but in extremely rare cases. What you need to remember is that if we see a triangle, then we are very likely looking at the fourth wave of the impulse. The impulse has five waves in total.

[05:16] comes the final culminating wave. And then the trend changes to the opposite. Or if we're talking about the global picture, a bear market is starting. Let's return to the chart of Salan's cryptocurrency. And let's find the triangle

[05:33] within the impulse on the left. I think it's obvious to everyone where exactly it is. It is where exactly it is. It is located in this place. And located in this place. And now let's mark the waves directly on the

[05:47] chart. Before that, I will, of course, highlight the triangle with these trend highlight the triangle with these trend lines so that I can easily find it visually . Now, what do we need? We will need tools that

[06:01] allow us to create wave markings on the chart. In Trading View we find this section and click on the arrow on the right. That is, I point to the section,

[06:13] the arrow is on the right. And before us, structures that exist in the wave principle are revealed. They are located in this place. To designate we will

[06:25] need everything except the last option. Let me explain why this is so. The thing is, if you have studied the wave principle, you know that there are some controversial structures like expanding and truncated structures. But the

[06:40] thing is that if we use them, we can easily get confused. This is the first thing. And secondly, these structures are not practical. I only use what is practically usable. That is, these are the most

[06:56] common and obvious structures. There are no controversial structures for me. So, we mark the impulse with numbers. We click on the Elliott impulse wave and mark the waves of this impulse. That is,

[07:12] this is the first wave, this is the second, third, fourth and fifth. Don't forget to take into account all the rules of the structures. Let's say the triangle structure has its own rules that must be

[07:28] followed. They are written in the guide. The impulse structure also has its own rules that must be followed. You can find all the rules

[07:41] in this guide. Next, we click on these waves and go to the settings of this waves and go to the settings of this indicator. Here we can see in indicator. Here we can see in this section the different degrees. Let's

[07:54] open them. And for higher timeframes, it is recommended to use degrees is recommended to use degrees that are higher. Let's say I choose this degree. And in order to avoid visual confusion in the

[08:07] visual confusion in the designations, I recommend using three sets of colors for the degrees. My chart is dark, so I use these colors starting from the bottom. That is, white, yellow, blue, white, yellow,

[08:23] blue, white, yellow, blue. This degree is blue for me. Accordingly, if I decide to make a wave marking of junior or senior degrees, then my color will be slightly different. Let me, for example, mark

[08:37] approximately the impulse within wave three. Let me remind you that the market is a matryoshka doll. And this degree turns out to be younger than the one I noted. I move to the I noted. I move to the next level and highlight it in yellow. This

[08:51] way, everything on my chart is structured and visually clear. So, back to the triangle. We marked the impulse with the triangle, implying that the triangle could only have formed in wave four.

[09:05] And after the fourth wave, a culminating impulse and a correction of a higher degree, a bear market, occurs. Everything fits together here, so we have correctly identified the impulse. To increase the likelihood that the markup is

[09:22] correct, we would like to use the wave principle rules. Norms are what are repeated in most cases, but not always. Let's turn to the guide. And here, let's say, we see the first

[09:36] here, let's say, we see the first impulse norm - this is alternation. If wave two, for example, is a sharp correction, then wave 4 will in most cases be a sideways correction. A sharp correction is a

[09:50] zigzag, and a sideways correction is a triangle or a flat. Now triangle or a flat. Now pay attention to this impulse. And we see that wave 2 is a sharp correction in the form of an obvious zigzag, and

[10:03] wave 4 is a sideways correction in the form of an obvious triangle. That is, the norm of alternation is present here. Another impulse norm. If we draw a

[10:15] parallel channel through the end of wave one and the end of wave 3, placing the third point at the end of wave four, then the trend line will be the target for wave five. Let's do that. That is, I take the instrument, the parallel channel,

[10:31] I put the first point at the end of wave one, the second point at the end of wave three and the third point at the end of wave four. Please note that the price reached the resistance trend line drawn through the end of waves 1 and 3.

[10:47] From there, the trend reversed . That is, this impulse norm is also observed. And finally, you can use the norm, which is manifested in the ratio of waves. For example, wave 5 is in most

[11:02] For example, wave 5 is in most cases 62% of wave 3. For this, we will need a trend- based Fibonacci extension tool . We place the first point at the beginning of wave three, the second point at the end of wave

[11:15] three, and the third point at the end of wave four. At the same time, we look at the global picture. The price movement is large, so we use a Fibonacci extension based on a logarithmic scale. We go to the settings, and there is a checkbox here that says that

[11:29] our Fibnach levels will be based on a logarithmic scale. And note that wave 5 on a logarithmic scale is exactly 62% of wave 3. Here, in essence, all impulse norms are observed, meaning we can

[11:45] be confident that we have done this marking correctly. Now let's take things in order. To most easily and effectively determine momentum, we first need to pay attention to the most obvious

[12:02] correction structures. The most obvious structure of a correction is a triangle, which in an impulse can only be wave four. We found this triangle, checked the guide to ensure all the rules were followed, and based on

[12:18] this triangle, we have already created a wave marking of the impulse. Also, using the guide , check whether all impulse rules are followed . And finally, to increase the likelihood that we have done the markup correctly, we can

[12:32] use the norms of a particular structure. That is, the impulse has its own norms, which are observed in most cases. And according to these standards we can determine whether we really have an impulse in front of us . So, based on the knowledge

[12:47] I gave you using the Salan cryptocurrency as an example, let's look at a real-world practical example that we worked through together. I will conduct an analysis of the

[12:59] asset itself from scratch and show what I relied on when making financial decisions. If my approach to the market resonates with you, I invite you to GY Premium. This is a channel where I broadcast real-life actions with personal capital: purchases,

[13:14] sales, scenarios, and updates on global markets from precious metals to cryptocurrencies. Over 100 instruments, quick reactions to movements and access to my portfolios. Link in the description, join the community. Let's look at an

[13:28] join the community. Let's look at an example using the XRP cryptocurrency. Weekly timeframe. And here, of course, the structure of the triangle immediately catches our eye. It is located in this place. We remember that within the impulse, the

[13:44] triangle itself can only form in wave four. Now let's mark the triangle itself. We mark correction structures with letters. A triangle has five waves, so we use the notation A B C

[14:00] D. This is the first wave of the triangle A. Next are B, C, D, E. We check that all the rules are followed. Here it is visually clear that all the rules are being followed, and therefore we have a

[14:12] 100% triangle in front of us. As for impulse waves one and two, we can, of course, mark them out, but this will no longer be so

[14:24] important, since it is important for us to work out this structure in practice. That is , what happened in the past does not particularly interest us if the structure is obvious. And here the structure is obvious - it is a triangle. Within the impulse, within the

[14:38] ascending structure of progress, it can only form wave four. Therefore, the past no longer particularly interests us. Only wave three as a price target setting. A little later I will show you how we will

[14:52] later I will show you how we will do this. So, remember that after wave four comes a culminating impulse and then a correction of a higher degree, that is, the beginning of a bearish market. Accordingly, we need to find targets for

[15:10] impulse wave five. First, we can look at the triangle potential target on a regular arithmetic chart scale. I switch to a regular chart scale. I switch to a regular chart and measure the distance of the largest

[15:22] wave of the triangle. Next, I substitute resistance to the trend line, and we resistance to the trend line, and we get a value in the region of $4. get a value in the region of $4. And then we remember that wave p of

[15:35] an impulse in most cases is equal to 62% 62% of wave 3. Or the next target is of wave 3. Or the next target is 100% of wave 3. As it is written in the guide,

[15:48] waves strive either for equality or for the proportions of the golden ratio. So we take the Fibonacci extension based on the trend and measure the distance of wave three.

[16:00] We place the first point at the probable beginning of wave three. It can be located either in this place or in that place. I will note the bare minimum. We place the second point at the end of wave three. And we place the third point at the end of wave four. At the same time,

[16:14] we see that the minimum target is extremely far away, much further than the potential of the triangle on the normal scale of the graph. And in this case, since the target is not very objective, we are better off using a Fibonacci extension

[16:29] based on the regular arithmetic scale of the chart. That is, we uncheck the box here and click OK. And now we have that the expansion is based on wave three on the normal chart scale. That

[16:44] is, in other words, if this distance was $3.5 for us, then the distance from the end of wave four to the end of wave five will also be either 62%

[16:57] of this distance, or this distance itself, that is, $3.5. And pay attention that 100% of the distance of wave 3 converges with the potential of the triangle on a normal scale. That is, this target is in the region of

[17:12] $4. It turns out that when working out an upward exit from a triangle, we can use level 0.618 as the first target , and level one as the second target see what we got in the end . The price reached our target as precisely as possible

[17:28] , and then a deep correction began, which may continue. Thus, thanks to the wave markings we made, we were able to work out the culminating impulse within the

[17:44] work out the culminating impulse within the framework of wave P. The analysis was given in Telegram in advance. The post has now appeared on your screen, you can view it. The next obvious structure that will make it easier and more

[17:58] effective for you to make wave markings is the diagonal structure. The diagonal is the diagonal structure. The diagonal can be initial and final. That is, using can be initial and final. That is, using the diagonal we can determine the beginning or

[18:11] end of any trend, any structure. Why is this structure obvious? Because it, like a triangle, gradually narrows. That is, it is easiest to determine it visually on the graph . Let's remember what she

[18:28] looks like. That is, we see a gradual narrowing of the range. And then a correction occurs with the opposite picture, the same thing . Visually, the narrowing of this range is immediately noticeable. And, accordingly, we can turn our

[18:44] attention to this structure. And already knowing where this structure is formed, we can, based on this discovered structure, make further wave

[18:56] markings of the asset. To do this, we look at the guide and see where a diagonal can form. The initial diagonal is a structure that begins at the beginning of a trend, and it can form either in the first

[19:10] wave of an impulse or in the first wave of a zigzag, but nowhere else. And the final diagonal, that is, the structure that completes the trend, can be formed either completes the trend, can be formed either in the fifth wave of the impulse or in the C wave of the

[19:24] zigzag. Also note that the final diagonal in some cases can form within the C wave of the plane. You can find out what this structure is from the guides. And, of course, let's not forget about the rules of diagonals. That is, once

[19:40] we have found this structure on the graph, we need to check whether it is really a diagonal. And we will be able to check this first of all according to the rules and secondly , to make sure according to the standards. Now let me do a wave

[19:57] analysis of the optimism cryptocurrency from scratch. The picture here is quite interesting. Coming soon, the opening start is the first stage of our educational program. We're almost finished developing: video tutorials with time codes, notes, tests, and a personal

[20:10] account with a progress bar. The goal is to provide beginners with everything they need to confidently get started in investing and trading. Stay tuned for more news. Soon you will be able to personally get to know the platform and evaluate it. possibilities. Visually,

[20:26] evaluate it. possibilities. Visually, the triangle in this place immediately catches our eye triangle within an impulse can only form in the fourth wave. But the thing is that before the triangle is formed, we don’t see any

[20:41] history, that is, it’s as if it formed immediately after the asset appeared. The point is that wave analysis is an analysis of the progress of a particular asset, a particular instrument. And

[20:55] sometimes, not even sometimes, but in most cases, the first waves on the price chart are not cases, the first waves on the price chart are not visible, since they may only be an idea. Therefore, if we see the formation of a triangle on a chart without

[21:08] any history, then, knowing where it is formed, we can make further wave markings based on this. For example, if we have a triangle formed here as part of the growth of this asset, then, most likely, it

[21:23] formed as part of an impulse. Therefore, the triangle is the fourth wave of the structure, and after it, the final fifth culminating wave is formed before a correction of the higher degree. Considering what I see on the chart,

[21:38] wave three most likely ended here, and the triangle is running. Why did I decide this? Because here we also see the formation of a triangle within the zigzag. The triangle is made up of

[21:51] zigzags, and we see the triangle within the probable wave of the zigzag. So if we mark a triangle on the chart, that's wave A, wave B, C, D, E. So what do we see next? We have finished wave five and

[22:07] the correction of the senior degree has begun. But this correction of the higher degree has a rather interesting structure. Let's take a look at the guide and see what our initial diagonal looks like within wave A of the zigzag. That is, here is this example. If

[22:22] we have a zigzag forming here, then obviously that suggests that it is more likely that we had an impulse structure here. Accordingly, the initial diagonal is located in this place. This is a structure of gradual

[22:35] narrowing of the range. Now let's return to the cryptocurrency optimism chart. This is a logarithmic graph. And here we see a gradual narrowing of the range. That is, we can assume that this situation

[22:50] is wave A of a zigzag, is the initial diagonal, a structure that is just beginning some kind of trend. And now we need to check that all the rules are followed. We look at the rules of diagonals and compare them with the current

[23:07] situation. Let me also mark this diagonal on the graph. just like this . And the degree, of course, will be smaller for us. And here all the rules are observed by us. And it is important to note that the diagonal rules must be observed on a

[23:23] regular arithmetic graph. I currently have a logarithmic graph open, so I'll switch to a regular arithmetic graph here. And, accordingly, here on the regular schedule we check compliance with all the rules. For

[23:38] example, if wave three should be no larger than wave one, then we measure the distance of wave one. For example, using the Fibonacci extension tool I place the first point at the beginning of wave one, the second

[23:52] point at the end of wave one and the third point at the end of wave two or, in other words, the beginning of wave three in this place. And we see that wave three place. And we see that wave three is 62% of wave one.

[24:04] is 62% of wave one. Here the rule and also the norm are observed. The norm is expressed as a proportion of the golden ratio, that is, wave 3.18 or 0.786 from wave 1. We

[24:17] check all the other waves in the same way. For example, we measure the distance of wave four relative to wave 2. And we see that wave four is exactly 62% of wave 2. Again, both the rules and the norm are observed here. Taking into account

[24:33] compliance with all rules and regulations, we clearly have the initial diagonal in front of us. And taking into account the conditions of formation, that is, we see here the end of wave four in this place, then the culminating impulse within wave five and then the

[24:49] formation of the initial diagonal. That is, here the initial diagonal is formed within the framework of a correction of a higher degree, and the structure of the correction is a zigzag structure. Accordingly, we here mark this

[25:03] Accordingly, we here mark this initial diagonal as wave A of the zigzag. That is, we have wave A, then we expect wave B and C. I make the degree one higher than the degree of the diagonal. That is, this is the degree of

[25:19] blue color. And taking into account the markings we made, namely that the initial diagonal is the structure of the beginning of a trend, then we conclude here that the downward trend has just begun . Therefore, the decline will continue in the future

[25:33] , at least within the framework of wave C. The analysis was given in Telegram in advance. Here is the very post with the very scenario that I noted. The post has not

[25:46] been edited and has about 130,000 views. And now let's see views. And now let's see what happened to the price in the end. We see what happened to the price in the end. We see further decline within the downtrend

[25:59] . That is, thanks to the ability to identify the most obvious structures, we were able to fit the rest of the markings to the chart, knowing where these structures might form, and based on this, we concluded what was

[26:14] most likely to happen to the price. Next, what conclusion can be drawn from this video? To conduct wave analysis on a chart more easily and effectively, it is important for us to pay attention to the key, most obvious structures.

[26:32] And knowing where these structures can form, within which higher-order structures, we can already make further wave markings of the asset based on these structures. And, of course, after finding a structure,

[26:46] we always check that all rules and regulations are in place. If you haven't yet memorized all these rules and regulations, this guide will help you. You can

[26:58] download it from the link in the description. Of course , that's not all. I also have many other life hacks that I use when conducting wave analysis and making financial decisions. But that's all we'll do for today.

[27:14] If you found this video helpful, please give it a like, subscribe to the channel if you haven't already , and click the bell to stay up to date with future helpful videos. I wish everyone all the

[27:26] best, profit, and victory. I love you all and bye to everyone.