CHAPTER 2

The Patterns That Describe Trending Market Movement

Now we begin to discuss the individual puzzle pieces that create the 14 Elliott Wave Principle patterns. Every market move can be described using just these puzzle pieces. You will be given a cheat sheet with the patterns in Chapter 4 to use as flash cards at your computer or to help with the study quizzes in this book.

People struggle with stick drawing representations of patterns. They seem to understand until they are given a bar chart. Then it all looks different to them and a blank stare appears on their face. I have seen this occur so often that I plan to try a different approach. Do not get hung up with memorization of the components like 5-3-5. That will come later. What I want you to learn is the feel of a specific pattern. That way you will recognize it more easily in different chart scenarios and when market character changes. If we look at patterns in many different ways, it is my goal to help you gain a better foundation so we can build upon these correct basics in the higher levels.

It is of paramount importance you truly understand that price swings and Elliott Waves are not the same thing. Everyone begins with counting price swings since these are the easiest to understand, but the final result is disastrous. Why? You learn to ignore the internal components of a price swing and overlook the rules.