What is the significance of wave degree in Elliott Wave Theory?
In Elliott Wave Theory, the concept of wave degree is crucial for understanding the fractal nature of market movements. Wave degree refers to the different levels of waves, each with varying degrees of magnitude and time frames. Here's a breakdown of the significance of wave degree in Elliott Wave Theory: Understanding Wave Degree 1. Fractal Nature of Markets: - Elliott Wave Theory is based on the idea that market movements are fractal. This means that patterns at smaller scales are similar to patterns at larger scales. Wave degrees help to categorize these patterns across different time frames. 2. Hierarchy of Waves: - Waves are nested within each other, creating a hierarchy. A complete wave cycle consists of five impulse waves followed by three corrective waves, but these cycles exist within larger cycles, which in turn are part of even larger cycles. - Each wave within this hierarchy is assigned a degree, indicating it...