Quote:
Originally Posted by dlynch82
what do you mean by a series of 1-2's?
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The phrase "1-2, 1-2, 1-2" comes from the observation across many markets that a "3rd wave of a 3rd wave" is very powerful, swift, and surprising. People on the right side of a 3rd-of-a-3rd make a large gain
very quickly. Since markets trend only 30% of the time on average, they are rare setups.
The "1-2, 1-2, 1-2" refers to the observation under Elliott made that the market is a fractal. A fractal is a repeating pattern that has "self similarity" at different scales. Elliott Wave practitioners use the term "degree [of trend]". When a market makes a big move, you will see the move first on the smallest scale. Then it will repeat and amplify at larger degrees until it exhausts itself. Then the process starts all over again.
I should really write it as 1-2, i-ii, (i)-(ii). See attached figure.
Wave (iii) is very powerful. This is the "3rd of a 3rd" wave. The waves don't have to overlap. You will also see this described as "sub-dividing". Of course, the structure I drew also looks like a double zig-zag, which is why generally you don't want to identify a sequence as "1-2s" unless the waves 1, i, and (ii) are clear impulses (5 wave sequences, or single clear, sustained moves).
Hope this helps.