Elliott Wave Theory Basics (2)

An important feature of Elliott Wave Theory is that they are fractal in nature. 'Fractal' means market structure is built from similar patterns on larger or smaller scales. Therefore, we can count the wave on a long-term yearly market chart as well as short-term hourly market chart.

Picture 2

Elliot Wave theory categorizes waves by relative size, or degree. Elliott discerned nine degrees of waves, and chose the names listed below to label these degrees, from largest to smallest:

1. Grand Supercycle
2. Supercycle
3. Cycle
4. Primary
5. Intermediate
6. Minor
7. Minute
8. Minuette
9. Sub-Minuette
The major waves determine the major trend of the market, and minor waves determine minor trends.