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Elliott Wave Theory Flashcards

7 cards from real CMT practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

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  1. Who developed Elliott Wave Theory after studying 75 years of stock market data in the 1930s?

    Answer: Ralph Nelson Elliott

    Ralph Nelson Elliott developed the theory bearing his name in the 1930s after extensive study of historical market data.

  2. How many total waves make up one complete Elliott Wave cycle (full impulse plus corrective phase)?

    Answer: 8 waves

    A complete Elliott Wave cycle consists of 8 waves: 5 motive impulse waves (1–5) followed by 3 corrective waves (A–B–C).

  3. Which inviolable Elliott Wave rule states that Wave 3 can never be the shortest among Waves 1, 3, and 5?

    Answer: Wave 3 length rule

    Elliott's Wave 3 length rule prohibits Wave 3 from being the shortest of the three impulse waves (1, 3, and 5) — it is one of three rules that cannot be violated.

  4. According to Elliott Wave rules, Wave 4 must not overlap with which prior wave's price territory?

    Answer: Wave 1

    The non-overlap rule states that Wave 4 cannot enter the price territory of Wave 1, distinguishing a valid impulse from a corrective structure.

  5. What Fibonacci ratio is most commonly used to project the length of Wave 3 relative to Wave 1?

    Answer: 1.618

    Wave 3 frequently extends to 1.618 times the length of Wave 1, reflecting the golden ratio's prominence in Elliott Wave projections.

  6. What percentage range does Wave 2 most commonly retrace of Wave 1 in an Elliott impulse sequence?

    Answer: 50% to 61.8%

    Wave 2 commonly retraces 50% to 61.8% of Wave 1 but must not reach 100%, as that would violate the rule that Wave 2 cannot exceed Wave 1's origin.

  7. Which wave in an Elliott impulse sequence is typically associated with the highest volume, strongest momentum, and widest price spread?

    Answer: Wave 3

    Wave 3 is typically the strongest and most dynamic wave, exhibiting the highest volume and momentum — it is often called the 'heart' of the impulse.