Here is the Chart of Cocoa where it presents the 5-wave form in its chart let us see it in detail as mentioned by Elliot Wave:

As for what the "basics" of a completed five-wave pattern are, this list has the Elliott wave rules and guidelines covered:

Rule: Wave 2 never moves beyond the start of wave 1

Rule: Wave 3 is never the shortest among the impulse waves 1, 3, and 5.

Rule: Wave 4 never ends in the price territory of wave 1

Guideline: When wave 3 extends, wave 5 is often equal to the distance traveled in wave 1.

Guideline: The five-wave structure forms a parallel trendchannel. You draw the top of the channel by attaching the peaks of waves 1 and 3; and the bottom, with the peaks of waves 2 and 4.

And we can see here from the above chart that how the trend of Cocoa came down after making fifth wave...

Hari Ommmm........

As a trader, you’re bombarded with countless possibilities that can make decisive action a stressful hire wire act. It’s no wonder your emotions can get in the way.

That’s why it’s so important to incorporate the Elliott Wave Principle into your trading. The Wave Principle has helped thousands of traders learn to manage their positions objectively, remove emotion and spot high-confidence trade set-ups.

This is the Basic Elliot Wave pattern with indepth study by which you can take better decisions and can understand the basics well which will make you all more clear and sharpen about elliot wave pattern.

I hope after readin my past articles now all are that much aware that there are three wave pattern of correction A, B & C. But today we will know more about that waves with a practicle examle.

In that chart there is a downward trend prevailing so the corrective waves are at upside but the main thing the author jeff canady had mentioned here was that normally the wave C is as much as equal to wave A in length. So, he has suggested in that chart that after a specific level the wave c will be decline as mentioned in the chart. And after that the same thing is happened in the chart which is mentioned in the below chart. Just have a look.

We can see here that as mentioned in the first chart the wave C has stopped its upside trend after the same level and came downwards.

Wave analysis is not a crystal ball and it won't always work this well. Still, it helps you limit the infinite number of future possibilities to one or two very likely probabilities. So, go and run.

Hari Omm..........

     

In case of a Flag pattern a flag like picture appears in a graph as shown in this two pictures.

As in first picture we can see when the chart crosses the flag a definite level after that it has picked up a trend and it has started to run on that trend i.e. upside.

while the samr like this in the second chart the chart line has crossed the level of flag below side and thenafter it has started its journey towards downside. its in short the basic of flag pattern.

Its easy na!

SO, say

Hari Omm........

RSI(Relative Strengh Index) shows the relative strengh of the stock. generally preferable parametres for the RSI is 20,80 as mention in the below graph of the RELIANCE CAPITAL.

Where If, the RSI chart touches or crosses the level of 20 one can buy the stock as described by GREENcoloured circles and can sell it when the RSI chart touches or passes or nearer to 80 as described by RED coloured circles.

Its very easy to use the RSI chart but it is very practical and useful method of predicting the stock.

                                                        

       HARI OM..........                                                                 

Stochastics is the method to know whether a particular stock is over bought or oversold and to buy or sell the stock accordingly.

E.G. If in the below chart the chart goes above the level 20 means it is overbought and one should sell the stock and if it passes or crosses the level of 80 means the stock is oversold and one should buy the stock..

This is the only funda and it is very useful for predicting the stock.

HARI OM.........