CMT Elliott Wave Theory 3

Question 1

What is an 'ending diagonal' (diagonal triangle) in Elliott Wave Theory?

Accepted Answer

A wedge-shaped impulse variant where all five sub-waves subdivide into three waves, common in Wave 5 or Wave C

Answer

A triangle that forms exclusively in Wave 4

Answer

A corrective triangle with expanding boundaries

Answer

A 5-wave pattern that moves counter to the larger trend

Question 2

What does the 'guideline of alternation' predict in Elliott Wave Theory?

Accepted Answer

If Wave 2 is a sharp correction, Wave 4 tends to be sideways, and vice versa

Answer

Waves 1 and 3 alternate in their Fibonacci ratios

Answer

Bull and bear markets alternate on a 4-year cycle

Answer

Even-numbered waves alternate in direction with odd-numbered waves

Question 3

What is a wave 'extension' in Elliott Wave Theory?

Accepted Answer

An elongated impulse wave with additional sub-divisions, typically in Wave 1, 3, or 5

Answer

Any wave that breaks beyond its projected price target

Answer

A corrective Wave C that moves beyond Wave A's endpoint

Answer

A wave that exceeds its expected time duration

Question 4

In Elliott Wave Theory, 'wave degree' refers to which concept?

Accepted Answer

The relative size and time duration of waves within a fractal hierarchy

Answer

The measured angle of a trend line

Answer

The number of sub-waves in a correction

Answer

The accuracy confidence level of a wave count

Question 5

The 'Rule of Equality' in Elliott Wave Theory states that when Wave 3 is extended, what relationship do Waves 1 and 5 tend to exhibit?

Accepted Answer

Waves 1 and 5 tend to be approximately equal in length or related by a Fibonacci ratio

Answer

Waves 1 and 5 are each extended to 1.618 times Wave 3

Answer

Wave 5 is always exactly 0.618 times Wave 1

Answer

Waves 1 and 5 both retrace to the same Fibonacci level

Question 6

A common method to project Wave 5's price target is to multiply the net distance from Wave 1's start to Wave 3's end by what Fibonacci ratio, added to Wave 4's terminus?

Accepted Answer

0.618

Answer

1.618

Answer

0.382

Answer

2.618

Question 7

What is a 'leading diagonal' in Elliott Wave Theory, and how does it differ from an ending diagonal?

Accepted Answer

A leading diagonal appears in Wave 1 or Wave A position; an ending diagonal appears in Wave 5 or Wave C position

Answer

A leading diagonal appears in Wave 5 or C position; an ending diagonal appears in Wave 1 or A position

Answer

A leading diagonal has expanding boundaries; an ending diagonal has contracting boundaries

Answer

A leading diagonal subdivides into 5 waves; an ending diagonal subdivides into 3 waves per leg