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

An ending diagonal is a wedge-shaped pattern in which all five sub-waves subdivide into three-wave structures, most commonly appearing in the Wave 5 or Wave C position.

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

The alternation guideline states that Wave 2 and Wave 4 tend to differ in character: if Wave 2 is a sharp zigzag, Wave 4 is likely a sideways flat or triangle, and vice versa.

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

An extension is an elongated impulse wave that shows additional sub-divisions (appearing to contain 9 waves instead of 5), most commonly occurring in Wave 3.

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

Wave degree describes the relative size and timeframe of waves in a hierarchical fractal structure, ranging from Grand Supercycle (multi-century) down to Subminuette (minutes).

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

The Rule of Equality states that when Wave 3 is extended, the non-extended Waves 1 and 5 tend to be approximately equal or share a Fibonacci ratio relationship.

CMT - Chartered Market Technician Practice Test

CMT - Chartered Market Technician Practice Test

CMT Elliott Wave Theory 3