How We Analyze Markets: Our Elliott Wave Methodology

Every count on Smart Wave Analysis follows the same process: start with the largest timeframe, apply the three Elliott Wave rules, use guidelines and Fibonacci ratios to pick the primary count, and set a clear invalidation level.

Step 1: Start with the big picture

We begin on monthly and weekly charts to find the largest clear structure. The meaning of any small wave depends on where it sits in the larger cycle.

Step 2: Apply the rules

We test every possible count against the three rules. Counts that break a rule are dropped. See the three rules.

Step 3: Choose a primary and an alternate count

When more than one count is valid, we use guidelines to rank them: alternation, channeling, wave personality, momentum and Fibonacci relationships. The best fit becomes the primary count, and the next best becomes the alternate.

Step 4: Set targets and the invalidation level

Targets come from Fibonacci extensions and retracements. The invalidation level is the price where the primary count would break a rule. We never publish a count without one.

We compare each count with related markets: altcoins with Bitcoin, dollar pairs with the dollar index, stocks with their index and sector fund. Agreement raises confidence. Conflict lowers it.

Step 6: Review and record

A second analyst reviews the count. Once published, it is dated. When a call reaches its target or invalidation level, it is added to the track record with the result.

How we grade calls

Hit: price reached the first target before the invalidation level.
Miss: price reached the invalidation level first.
Partial: price moved in the expected direction but did not reach the first target before the count changed.

Limits of our method

Elliott Wave analysis involves judgment. Our counts are opinions based on chart structure, not certainties. Markets can change direction because of events no chart can predict. Always manage your own risk.