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Neo wave is an Advanced Elliott wave method with more number of rules and newer

patterns to increase the overall objectivity.

Orthodox Elliott wave was originally discovered by R. N. Elliott in 1930s. His

original work mentioned that stock market does not move randomly but in systematic
fashion that follows Fibonacci numbers and natural laws. This systematic movement
in prices are in form of waves. Normally there are 5 steps forward and 3 steps
backward resulting into a net progression which is valid for stock market as well.
The concept cannot be just applied but one needs to understand the basic premise
and certain rules to apply it objectively.

Any price movement as per basic Elliott wave is classified into Impulsive and
Corrective. There are various patterns within these broader heads. Impulsive waves
need to follow three basic rules:

Wave 2 cannot retrace complete of wave 1

Wave 3 cannot be the shortest of the directional waves 1, 3 and 5
Wave 4 cannot enter into territory of wave 1
The above 3 basic rules if followed then the price movement under consideration can
be classified as a normal Impulse wave.