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**Disclaimer **

This chapter will explain how to begin the process of analysis, what to look for, and how to select the appropriate input information to do an analysis with.

For starters we are looking for Elliot Wave patterns. I prefer simple ones, standard A-B-C patterns (3's), and sometimes 1-2-3-4-5 patterns (5's). This book will not be an Elliot Wave primer, I will assume some familiarity with these concepts.

Being that the simplest pattern is the A-B-C pattern, this is where we will start.

Here is an example of this pattern:

It would be nice to know where this pattern would bottom, wouldn't it?

To help determine this, we need some standard concepts to apply to all charts, and this will help to determine what price and time information is to be copied from this, or any other price chart, to make calculations possible.

All price and time measurements will be taken from a 'start' point that represents where the pattern started. You can see that this clearly is the point where the two red lines cross in the picture below. This is the 'start' point, which is the most important price and time point.

So what are the important parameters and how do we measure them?

We need the price and time covered by wave A, and the price and time covered by wave C. The parameters of wave B are unimportant, and won't be needed.

So what we are looking for is the following quantities as in this diagram:

We are seeking the price spans and time spans of waves A and C, as they relate to the price and time levels of the 'start' point.

So these calculations are fairly straightforward. We subtract the height of waves A and C from the 'base price' of the 'start' point to get the price spans of waves A and C. Then, we subtract the date of the 'start' date, from the dates of the tops of waves A and C to get the time spans of waves A and C. No higher math here.

So when we have these quantities measured, we have one final calculation yet to do to produce a very simple but important measurement. It is as follows:

The **PTP **is **the **basic math concept, the building block of all of the math to follow. It is clearly a simple concept.

Now, what do we use this for?

The PTP is the 'atom' of this analysis. In a sense, we are going to use it to build a slightly more complex formula, sort of an analogue to a 'molecule'. This new formula is expressed as follows:

**EPTP **= e^(-(LN(PTP) *time span of A) / time span of C)

For

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