In my previous Nifty analysis, I mentioned the possibility of markets having made a bottom or very close to the bottom. Markets rose as expected and now we are somewhere in the middle of wave “3”. Notwithstanding small corrections, markets continue generally on the upward trajectory as shown above.
Markets are fractal in nature as per elliot theory OR one can count a complete set of 5 waves WITHIN the larger wave.
Fractals are mathematical objects that exhibit self-similarity at different scales. This means that the same patterns can be seen at different levels of magnification. In the context of Elliott Wave Theory, this means that the same wave patterns can be observed in different time frames, from the smallest intraday charts(for example the one-minute chart above to the largest multi-year trends.
The fractal nature of Elliott Wave Theory is demonstrated by the fact that the same patterns can be observed at different scales. For example, an impulsive wave (for example wave 3 shown on the above chart, is made up of 5 waves by itself) This means that traders can use Elliott Wave Theory to analyze price movements in different time frames and decide for themselves the risk/reward ratio.