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Hello everyone,
I'm very happy for this wonderful lecture from our seasoned crypto-professor @fendit Which focused on: "ELLIOT WAVE THEORY" And the application of this wonderful theory into crypto-world. This post is created from the details given by our crypto-professor to form My HOMEWORK TASK:
A) Based exclusively on the lecture and personal research;

• What's the application of this theory?
• What's the impulse and corrective Waves? How can you easily spot different waves?
• What are thought of this theory? Why?

B) From a selected coinchart, spot different waves on it and explain in detail everything you observe in that chart.

ELLIOT WAVE THEORY

Ralph Nelson Elliott was The accountant that develop this principle which is very helpful in identification and studying of market trends.

Due to the dynamisms and Volatility of the market, Technical analysis of the trends is very important since it will help the investor to maximize their interests and minimize their losses. This principle focuses mostly on MARKET CYCLES AND MARKET TRENDS Which he discovered that varies depending on the psychological tendencies of the buyers and sellers in the Market's space at the point in time.

However, Market cycles have to do with the price fluctuations frequently due to the strong dynamic influence of demands and supply chain. The more, the supply, the price will drop drastically but as soon as the price drops, the more, the demands and more, the demands, the supplies will increased that's exactly the cycles of the market. Most of time, there's a panic effect on the players in the market that drives this cycles.

Market trends involves the uptrends and downtrend, support and resistance. In the uptrends, which is the peak on the timeframe of the market, the price is increases, sellers are of high number in respect with the number of buyers. Although there are circumstances that influence the decision and normal situations at the #uptrends while in the downtrend, the price is low, there's much buying than selling at this time. This Market #trends focused mostly on the duration of the market too.

This Market movements is being influenced by the psychological tendencies of the buyers and sellers in the #market. According to Elliott Waves THEORY (EWT), This #psychological tendencies is refered to as the CROWD PSYCHOLOGY. This tendencies Which is emotional, can affect the market value positively and negatively.

WHAT'S THE APPLICATION OF THIS THEORY?

This theory is very important in Technical analysis of the market in these ways.

• With the help of this theory, we can identify the Price Trend in a given trade. This #price trend involves the pattern at which the prices ranged constantly. With this in mind, we can know the right time to invest and sold our asset in order maximize the profits therein.

• Decision-making, Good Market's decisions are made correctly from proper Technical analysis, not sentimentally. With the studies of the market trends and cycles, One can make good, if not best market decisions.

• Technically equipped, With this knowledge of this theory, one can boast of being technically sound which is highly appreciated in Crypto-world. Like the use of stop loss level, support and resistance levels too

WHAT'S THE IMPULSE AND CORRECTIVE WAVES?

IMPULSE WAVES

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This is a technical term used to describe the pattern of flow of the price and the volume of trade in any given Market. It can be present both in downtrend and uptrends. But, it have be a strong move, flow or influence of the price with the financial assets placed in the market at that given time.

In EWT, the impulse waves can be up to 5 sub-waves although the shortest ones can be 3 sub-waves or moves in a trade and if not, corrective waves will set in during the same market cycles. But, it runs in the same direction in a given trends during it's timeframe.

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This idealised impulse waves shown above, have a five sub-waves in the total movements of this typical #impulse wave in a same trend. It's very easy to be identified and can be labeled. The identification and labelling of the impulse waves in a typical coinchart will be helpful in knowing the price trend of the given market.

CORRECTIVE WAVES

This is the Technical term used by EWT to describe the opposite direction of the value flow of the market price and traded volume in a the market trends. It moves in shorter degrees to be compared with the impulse waves.

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Corrective waves can be 3 sub-waves. In this picture above, it's labeled a,b and c. It's a pattern of price flow But it must be opposite of the impulse waves. It can comes in up to 21 types, but the most commonly types includes:

• Zig-Zag waves
• Flat waves
• Triangle waves.

This different types of corrective waves comes in several forms and very helpful in technical analysis.

How can you easily spot different waves?

To identify the various waves, these are the following tips of them:

• Wave one is the beginning of the cycle, the onset of the uptrends.
• Wave two moves in opposite direction but not a corrective waves but it's a small regression in the flow due to the fact that some investors sold and took profits since there's a upsurge in price from the wave one.
• Wave three shows the conrelation of the increased coin prices and traded volume of the coins. It's usually the longest waves.
• Wave four shows a small regression in price due to profits maximization mechanism of the investors as seen in wave two.
• Wave five usually very short due to the aggressive temperated buyers whose bought coins at very high prices.

What are thought of this theory? Why?

Elliot Waves THEORY is a great Technical studies tool to know the nature of the market trends and cycles in order to predict the price movements.

Personally, I really appreciate this theory because of the fact that it's helpful in discerning the profits maximization opportunities and ability to cater the dynamisms of the market space.

From a selected coinchart, spot different waves on it and explain in detail everything you observe in that chart.

Screenshoted from CoinGecko App

In this coinchart above, it's a trade of the coin known as the Celsius Network (CEL) within 24 hours timeframe.

The predominant impulse and corrective waves are labeled and will be explained by me:

• Wave 1: although not the beginning of the trade for the day but the initial rise from the stop loss level. It is very short and not prominent due to the fact that there are few buyers.
• Wave 2: there's a small regression resulting from the fact that the few buyers from the wave 1 sold their assets to make profits.
• Wave 3 Shows a sharp increase in the price of the coin due to the increase in the number of the buyers.
• Wave 4 shows the same "small regression" of the wave 2 and it happened due to the selling of the assets of the #investors as same as the wave 2.
• Wave 5 is the longest waves of all due to the increment of the number of the buyers in the market.

Corrective Waves

• Wave A: the price of the coin dips down as more assets are sold by the investors. The wave direction is opposite
• Wave B. There is a little stability between the buyers and the seller and the difference is not sharp.
• Wave C. There's a sharp decrease in price and there's more sellers than buyers. Same as the wave A.

Conclusion

The volatility of the market trends and cycles makes crypto market very interesting. For one to maximize their profits, Technical studies should be encouraged and improved.

Thanks to you, my seasoned crypto-professor @fendit, @steemcurator02 and @steemitblog for the encouragement, enlightenment, motivation and support.