Wave Theory & Cycle Analysis Flashcards
6 cards from real CTA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Wave Theory & Cycle Analysis flashcards as text
In Elliott Wave Theory, a 'diagonal triangle' pattern typically appears in which wave positions?
Answer: In Wave 1 or Wave 5 (leading diagonal) or in Wave A or Wave C of corrections (ending diagonal)
Diagonal triangles come in two types: leading diagonals appear in wave 1 or A positions, while ending diagonals appear in wave 5 or C positions, both featuring overlapping wave structures.
What does a 'flat' correction look like in Elliott Wave Theory?
Answer: Three waves labeled ABC where wave B retraces close to 100% of wave A and wave C ends near wave A's start
A flat correction (3-3-5 structure) has a nearly full retracement in wave B and a wave C that ends near or at the origin of wave A, reflecting strong underlying buying or selling pressure.
In Elliott Wave Theory, which type of corrective wave involves five waves rather than three?
Answer: A triangle
A triangle correction in Elliott Wave Theory is labeled ABCDE and consists of five overlapping waves in a contracting or expanding pattern, unlike most corrections which have three waves.
In cycle analysis, what is 'left translation' and what does it imply?
Answer: A cycle that peaks in the first half of its nominal duration, typically bearish
Left translation occurs when a cycle peaks earlier than the midpoint of its nominal duration, indicating that bearish forces are dominating and the subsequent decline may be steep.
The 'Kondratieff Wave' (K-wave) is a long-term economic cycle with an approximate duration of:
Answer: 40–60 years
The Kondratieff Wave is a long-wave economic theory proposing approximately 40–60 year cycles of boom and bust driven by technological and capital investment patterns.
In Elliott Wave Theory, what characteristic defines a 'third wave extension'?
Answer: Wave 3 is significantly longer than waves 1 and 5, often reaching 1.618 times or more the length of Wave 1
An extended Wave 3 is the most common extension type, characterized by exceptional length and strong momentum, often equaling 1.618 to 2.618 times the length of Wave 1.