Elliott waves exhibit fractal (self-similar) structure: the same 5-3 pattern appears at every degree of trend. Each wave contains smaller waves of the same form.
Description
The defining characteristic of Elliott Wave Theory is its fractal nature: the 5-wave impulse and 3-wave correction pattern appears at every level of the wave hierarchy. A single wave 3 at the Primary degree contains a complete 5-wave impulse at the Intermediate degree, which itself contains 5-wave impulses at the Minor degree. This structure extends from multi-century Grand Supercycle waves down to minute-level waves.
Key Points
- Each actionary wave contains five smaller waves; each corrective wave contains three smaller waves
- The pattern is self-similar across all degrees — from centuries to minutes
- Wave degree is relative — the same price movement can be labeled as different degrees depending on context
- Fractal structure was described by mathematician Benoît Mandelbrot (1977) after Elliott’s original work
- Practical implication: analysis at multiple time frames simultaneously provides a more complete wave picture
