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Strategies & Market Trends : DAYTRADING Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: Robert Graham who wrote (2095)	7/26/1999 8:57:00 PM
From: TraderAlan	Read Replies (2) \| Respond to of 18137

Bob, This has been pasted to my trading table for a number of years. It comes from a futures trader I know and respect greatly, who uses only EWT to trade. It's -all- I care to know about the subject and it's served me well: "In EW, there are only two kinds of waves, impulsive or corrective. There are very specific rules that an impulse wave must meet. If these rules are not met, then the wave is corrective. An impulse wave is made up of 5 adjacent segments. The 1st, 3rd and 5th segments "thrust" in the same direction. Immediately after the 1st segment, a minor move in the opposite direction takes place (2nd segment). This 2nd segment can never retrace all of the first. The 3rd segment must be longer than the 2nd. The 3rd segment can be shorter than the 1st or 5th, but it cannot be the shortest of the three thrusting segments. Immediately after the 3rd segment, a minor move in the opposite direction of the 3rd (but in the same direction as the 2nd) takes place (4th segment). The 4th segment cannot overlap any part of the 2nd segment (there is one special exception to this rule, but I won't confuse you with that now). Even with the special exception, the 4th segment can never retrace all of the 3rd segment. The 5th segment will almost always be longer than the 4th, but it is not required." Alan