CTA Wave Theory & Cycle Analysis 2

Question 1

In Elliott Wave Theory, a 'diagonal triangle' pattern typically appears in which wave positions?

Accepted Answer

In Wave 1 or Wave 5 (leading diagonal) or in Wave A or Wave C of corrections (ending diagonal)

Answer

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.

Question 2

What does a 'flat' correction look like in Elliott Wave Theory?

Accepted Answer

Three waves labeled ABC where wave B retraces close to 100% of wave A and wave C ends near wave A's start

Answer

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.

Question 3

In Elliott Wave Theory, which type of corrective wave involves five waves rather than three?

Accepted Answer

A triangle

Answer

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.

Question 4

In cycle analysis, what is 'left translation' and what does it imply?

Accepted Answer

A cycle that peaks in the first half of its nominal duration, typically bearish

Answer

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.

Question 5

The 'Kondratieff Wave' (K-wave) is a long-term economic cycle with an approximate duration of:

Accepted Answer

40–60 years

Answer

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.

CTA - Certified Technical Analyst Practice Test

CTA - Certified Technical Analyst Practice Test

CTA Wave Theory & Cycle Analysis 2