NEOWAVE LIBRARY
 QUESTIONS & ANSWERS
Elliott Wave, NEoWave, Forecasting and Wave Analysis

This vast library of questions and answers is valuable and unique – providing answers that goes beyond orthodox Elliott Wave. You'll find insightful discussions on "NEoWave", "rules," "x wave," "Diametrics," "Symmetricals," "Triangle" and more!

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Question of the Week Forum (End of an Era)
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Thank you Glenn Neely for making Wave analysis logical and scientific. I have a question. "When doing analysis, should I start with the smallest time frame and work my way up OR begin with the largest time frame and work my way down?"
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Is it ever possible for wave 2 to be a Triangle?
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Regarding contracting and neutral triangles, is there a time limit for post-pattern "thrust"?
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In NEoWave Symmetrical patterns, what are the minimum and maximum price / time relationships allowed between waves?
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What is the NeoWave Reverse Logic?
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If wave-A (of a Flat) on a monthly chart is shorter in time than wave-B but, on a weekly chart, wave-A is longer in time than wave-B, should the higher time frame still rule over the smaller?
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Can wave-B (in a Triangle) be the longest in price? If so, what Triangle variation is forming?
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What Fibonacci relationships are present in Diametrics and Symmetricals?
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In TRIANGLES, please explain the difference between Standard Alternation and Reverse Alternation.
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How large can wave-C get in a neutral Triangle?
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Does wave-C of a Triangle always take more time than A-wave OR can it sometimes take less time than A-wave?
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During national holidays, financial markets are often closed. As a result, the number of bars for such weeks are less than 5. In those situations, do we use the next Monday's data to complete the 5-bar high/low Wave plot OR do we simply plot the high and low of the actual week, even though it is missing a day?
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First, if the 5th wave of an impulsion is Terminal, will it take more time or less time than the previous 4th-wave? Second, do the normal time rules of an impulsion (such as wave-2 taking more time than wave-1 OR wave-4 taking more time than wave 3) apply in Terminals?
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In Complex corrections, can the correction after the X-wave take less time than the correction before the X-wave?
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When you compare the price and time of Waves, do you measure them from their structural starting point to their ending point OR do you measure from the lowest price point to the highest price point?
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Is there any time limit for wave 2 with respect to wave 1 and wave 4 with respect to wave 3 in an impulse?
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In the past, you've mentioned the concept of "Supplemental Price & Time" in your private classes and in your Forecasting updates. Please define that concept along with when and where it is allowed.
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It has been 30 years since you wrote Mastering Elliott Wave. With the increasing complexity of markets, along with the new patterns you discovered after its release (Diametrics, Symmetricals, Neutral Triangles), does Chapter 3 still provide the proper foundation for learning and applying Wave theory?
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Which type of logarithm scale do you use on your charts?
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When applying Fibonacci relationships to markets, what is the best approach?
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Have you tried to apply NEoWave concepts to hourly charts? Would those charts provide a good foundation for insight into daily price action?
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Can Elliott Wave (or NEoWave) be used to analyze and predict cryptocurrency markets like Bitcoin?
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Is there any place we can go to read about new patterns (post 1990 mew book) and the rules governing them?
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Can an X-wave ever be between 61.8% and 100% in PRICE of the preceding standard pattern?
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Where can I find information on NEoWave Diametric and Symmetrical formations?
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You suggest logarithmic charts when doing Wave analysis. Sometimes I see you use linear charts in your Forecasting services. What type of chart is best for accurate 0-2 and 2-4 trendlines and why do you switch back and forth?
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When an X-wave is longer in price than the prior A-B-C, should it be longer or shorter in time than the prior A-B-C. In your book you state it must be longer if the X wave is larger, Yet in your videos you state that X waves should be shorter in every instance. Please could you clarify your thoughts on this.
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Is overlap between wave-d & wave-f essential to the development of a NEoWave Diametric formation?
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How do I measure Fibonacci ratios between two waves on a logarithmic chart?
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In expanding Triangles, is it necessary for wave-d to "overlap" wave-b?
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In a contracting triangle, can the e-leg be larger in price than the d-leg?
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Your book does not mention "leading diagonals" (i.e., a Terminal in the position of wave-1 or wave-a). Many Elliott Wave analysts recognize such patterns; do you think they exist?
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It was my belief that no leg of a Triangle, except for wave-e, could itself be a Triangle. Am I correct?
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If wave-B (in any pattern) takes less time than wave-A, can I confidently assume a ZigZag or Flat is NOT underway but instead that a Triangle or Diametric is forming?
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Is it necessary that all major tops complete with a violent reversal?
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If wave-5 subdivides (inside of a Terminal impulse), can part of it break the 2-4 baseline?
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I've been told if you ask 10 Elliotticians about the future, you'll get 10 different answers. If so, why and does NEoWave solve this problem?
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Sometimes you measure time consumed by a pattern from its highest to lowest point. At other times, you measure from the beginning or end of a pattern. Why?
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In an expanding triangle, must the time of wave-c be longer than the time of wave-a?
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Mastering Elliott Wave was written before the internet or automated, computerized trading systems existed. Do such things as "high frequency trading" negatively impact the viability of Wave theory?
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Frequently, in your Trading service you enter markets, move stops and exit positions inconsistent with your wave theory forecasts. Why?
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Many analysts expect the bear market (starting in the year 2000) to end by 2014 or 2017. You expect this bear market to last until at least 2020 and possibly as far out as 2030. Why?
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Starting with the high in 2000, you say wave-4 could be forming an expanding Triangle. But, the "thrust" potential of such patterns is limited; therefore, how can the DOW reach your long-term target of 100,000 by the year 2065?
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To project the time of wave-e in a Triangle, sometimes you use waves-a & c and other times you use waves-c & d. Does this relate to the type of Triangle forming OR do both methods work?
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How did you know in 2007-2008 that a 4-year bear market was starting? Also, why did you extend the bear market from 4 to 6 years?
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Recently, you released trading performance for all NEoWave Trading services. During the last 2 years, like most Elliott Wave analysts, you were frequently bearish on the U.S. stock market. How is it possible you made money during that period?
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In Mastering Elliott Wave, you describe one type of confirmation. But, in the NEoWave Trading service you frequently employ a different type of confirmation. Are these two approaches interchangeable?
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How do we interpret opening gaps and do they hide structure (like missing waves)?
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If an expanding Triangle is forming, what is the probability wave-e will terminate above the bottom of wave-c?
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With all, major world markets open around the clock, could you please explain why it is so important to use "cash data only" for wave analysis?
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The Fed keeps printing money, Gold keeps going up and everyone is worried about inflation. How can you be predicting deflation in the future?
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In the past, you've warned that markets are difficult to predict when wave structure is in its "middle phase" of development. What techniques should one use to trade such periods?
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How much can wave-2 retrace of wave-1? Most orthodox EW analysts allow 99%, but it appears NEoWave only allows about 61.8%.
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Can wave counts, and their implications, differ from one time frame to the next for the same market? If so, what does it mean?
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Can I use the Time rules (in Chapter 9 of MEW) to allow wave-A of a Flat, Zigzag or Triangle to be equal to the combined times of waves-B and C?
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Rather than a 4-6 year bear market staring Jan. 2008, is there a level on the S&P 500 that would indicate a new, bull market started March 2009?
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When are you are going to provide archives of your NEoWave forecasts?
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How can you determine the beginning and end of a wave?
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Since mid 2009, despite how much the stock market has rallied, no Elliottician (including NEoWave) have us in a new bull market. Why?
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How do you reconcile (or view) current news events within the context of wave structure and expected, future market action?
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What is your view on pyramiding (i.e., adding to successful trades)?
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What is the MOAT Index (you wrote about it recently in your Trading Service)?
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Most books and EW analysts seem to ignore the rule of extension listed in Mastering Elliott Wave (i.e., the longest wave must be at least 161.8% of the next longest). Is this rule a requirement or just a preferred condition?
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Given the similarity of price and time exhibited by each leg of a symmetrical, is that pattern more likely to drift sideways rather than trend up or down?
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Why are NEoWave Hourly and Daily trades quoted in futures while Weekly trades are quoted in ETFs? Why not all the same?
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You frequently talk as if trading can be profitable without forecasting...I'm confused.
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Japan's stock market has been in decline for 20 years. Is there a chance the U.S. will experience a similarly long, bear market or economic contraction?
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Recently, the wave structure in your Forecasting service was different than that in your Trading Service. Why?
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From the high in 2000, you've long said wave-4 would last about 20 years, but wave 2 is only seven years. How did you determine this time frame for wave-4?
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How does your analysis differ from orthodox Ellioott Wave analyst's who, once again, are predicting a depression and a Dow down to 400?
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Is Chapter 3 of Mastering Elliott Wave important or necessary for those who are already experienced with wave analysis?
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In your Trading updates you use more than just wave theory to do market analysis and trading. How do you decide what type of analysis to use and when?
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In past updates I've seen you reference waves-F and G. Is there a limit to this wave "alphabet"? Why not just begin anew with a-b-c?
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I've followed NEoWave's S&P strategies for 6 years. During that period you mostly went Short. How come and what conditions must exist to go Long?
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On two charts of the same market (one arithmetic, one logarithmic), the extended wave is a different wave depending on which chart I use. Which chart should I trust?
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Twenty-years (20) after Mastering Elliott Wave, do you still mantain that the 0-2 and 2-4 trendlines should not be violated by any leg of wave-3?
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You no longer use the term extracting triangle...why not?
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If you had software to apply "Position Indicators" according to Mastering Elliott Wave, it would remove drudgery, leaving logical analysis to the individual.
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In Chapter 8 of Mastering Elliott Wave you show many complex formations ending with contracting triangles. Is that how they should always end?
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You rarely mention Fibonacci relationships in your work. Do you use them, but just don't mention it? Or, do you simply not use them?
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Do you have software that does NEoWave analysis? If not, why not?
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Can you have two Elliott patterns, such as a Flat and ZigZag, next to each other without an X-wave between?
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In an expanding triangle, is there a maximum time limit for wave-E?
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In a NEoWave Diametric, what would be the maximum Time deviation between adjacent waves?
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I have not seen you comment on the social implications of wave structure. Is it useful in predicting such trends?
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Could you explain the advantages and disadvantages of both futures and ETFs.
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Why is Neely River Theory (NRT) so secret and so expensive...do you ever plan to make NRT public?
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Based on Mastering Elliott Wave, it is my understanding that only wave-E of a Triangle can be a Triangle itself. Your book was written 20 years ago, is that statement still true today?
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Regarding market suitability, in MEW you stress "Current value must build on the past and time cannot automatically have a negative effect on value." What does that mean?
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How do you use or interpret fundamentals and does news move markets?
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You don't seem to care much whether your forecasts come true. You change your mind at the drop of a pen if the market does the slightest thing wrong. How can you trade like that?
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Why do you normally risk only 1% of capital on trades? If I have $10,000, and only risk 1% ($100), I would not be able to use the stops you recommend.
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Why do you not release intra-day, real-time analysis ? Isn't that important considering the fractal nature of wave theory?
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What is NEoWave's "trading" style?
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Sometimes you say to go 1/2 Long or Short and sometimes you say risk 1% of capital on a trade. What does this mean?
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Do you plan to develop NEoWave software? If not, why not?
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In your NEoWave TRADING services, you have mentioned the concept of price behavior many times. What is price behavior?
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Is it just me or are markets spending the majority of their time correcting lately? Also, many thanks for providing such enhancements to Elliott's work.
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If you are sure a contracting triangle formed, how can you be sure of the direction of the "thrust"?
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From years of teaching classes and interacting with wave analysts, what common mistakes do most make?
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Many orthodox Elliott Wave analysts believe we are in a secular bear market and that the Dow Jones Industrial average will bottom near its 1920s bull market top (i.e., 400). Do you agree?
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When you have a diametric formation, and wave "G" has finished, what can be expected afterward (price and time)?
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Since Triangles occur frequently, but are often misinterpreted, what clues exist (early on) to tell us a Triangle is, or is not, forming?
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What percentage of profitable trades must one have to be considered successful and intelligent?
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When plotting wave charts (as described in Chapter 2 of MEW), what happens if the high or low of the day, week or month occur twice (e.g., a low occurs March 1 and then March 31)?
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Ellioit wave worked well in the 80's, now its accuracy is disappointing. NEoWave works great today, but how can we be sure it will work well 20 years from now?
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In past NEoWave TRADING reports you have talked about market declines being faster than rallies or vice versa. Can you explain how you determine such things?
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When you set your stop loss, what do you consider most important?
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We all know Wave Theory is best suited for stock averages and non-consumable items, not individual companies. Using only price data to count waves, how can one pick the best stocks?
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Since Mastering Elliott Wave, have you developed new ways of applying TIME to categorize corrections?
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Answers to Common Elliott and NEoWave Questions
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I have been practicing orthodox Elliott Wave for years. If I upgrade to NEoWave, would it be difficult to understand? I'm concerned NEoWave theory appears to be in opposition to Elliott Wave.
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How much leverage do you suggest for trading your futures recommendations?
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What makes NEoWave better than Elliott Wave?
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Does inflation effect Elliot Wave/NEoWave development and should I "fix" it by plotting in constant dollars or just forget about it and plot in current dollars?
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Many believe the stock market, particularly since 1987 (and most certainly from 2003 to 2007) has been manipulated. Wouldn't that manipulation impact proper Elliott and NEoWave pattern developement? How do you compensate for that influence?
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Why is it that hourly, daily and weekly traders sometimes begin with the same entry and stop? Aren't hourly traders expected to be more adept and use smaller stops than daily or weekly traders?
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In Mastering Elliott Wave, you talk about "missing waves." What is this NEoWave concept all about and doesn't it conflict with the X-wave phenomenon?
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Why do you release NEoWave TRADING updates in the middle of the day?
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Most traders seem to lose money when they play options. Why ?
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In a Running correction, what is the maximum wave-b can exceed the end of wave 1?
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If NEELY RIVER technology allows one to trade effectively without forecasting, does wave analysis offer any advantage?
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Can the middle wave of any corrective formation be the shortest in length? I know NEoWave says it can never be the shortest in time.
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Is there a rule that can be used to determine if a move is an A,B,C or the 1,2,3 of an ongoing impulsion?
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Which charting service do you recommend in order to get the best cash data plot.
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You mention in Mastering Elliott Wave, on page 5-25, the concept of touchpoints within a Triangle. How important is this rule and does it always apply?
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Is NEoWave suitable for individual Stocks?
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Sometimes b-waves are larger than a-waves, sometimes they are the same size and sometimes they are smaller than a-waves. Does it mean anything?
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Before every trade, all of us experience many emotions, which create false trades with failure to follow NEoWave rules. How are you fighting emotions?
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Must the 2-4 trendline be drawn across the END of waves-2 and 4 or across the lowest points of waves-2 or 4?
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Can an X wave take place after a Flat even if the Flat does not channel "perfectly"?
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What is the maximum length of wave-c in an Elongated Flat and can wave-c be a Terminal in such a pattern?
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Why are the drawings of wave patterns in Mastering Elliott Wave so different from all other books on Elliott Wave?
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You don't mention Fibonacci relationships much in your updates. What use or benefit does Fibonacci have in NEoWave?
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What is the importance of channeling and how do you use it?
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Referring to Fig. 8-25 of Mastering Elliott Wave, "is it possible that wave X could retrace into wave A and still hold the pattern implications?"
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Is it possible for waves-b and d in a triangle to consume less time than waves-a and c?
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In MEW you say the thurst out of a Running, Contracting Triangle can be up to 261.8% of the largest leg of the Triangle. Is this a strict rule or just a guideline?
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Could you briefly explain what is meant by "river theory"?
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Is the concept of degree, appearing in "Mastering Elliott Wave", and its frontier value of 1/3, a good rule to differentiate smaller-degree waves from larger-degree waves?
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When a market is forming a significant top, would it be accurate to say that, while Elliott rules will be respected, guildlines with fall by the wayside?
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Do you think options are a reasonable way to trade using your service.
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If you are counting waves on an hourly timeframe, how many bars at most should you ideally have in view?
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While plotting highs/lows, only price is used, but the time difference between them is not. Do you think it is of no use when and at what time highs/lows occurred. And if you think they are useful, please tell us how it can be used to detect the structure of monowaves?
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Why is the NEoWave TRADING service separate from the NEoWave FORECASTING service. Isn't the purpose of both to successfully trade markets?
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How do you differentiate between the end of a Contracting Triangle and an ongoing Diametric or Symmetrical?
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In other publications I frequently see wave counts such as 1-2, i-ii, 1-2, followed by a 3rd of a 3rd Extension. How come you rarely have that in your NEoWave Chart and Trading services?
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Is there a FLAT where the complexity of leg "a" is greater than leg "b" and leg "c"?
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is there any way of determaining the end of the 5th wave of a 5th Extension Impulsion (Terminal or Trending) before the break of the 2-4 trendline.
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What is the smallest time frame you actively apply NEoWave theory to and how much time do you spend on a particular market to make your analysis and trading decisions?
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Since triangles occur frequently, but are often misinterpreted, what clues exist to tell you a pattern, which looks like a triangle, is not a triangle?
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Since triangles occur frequently, but are often misinterpreted, what clues exist to tell you a pattern that looks like a triangle is not a triangle?
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Is there any relationship between the complexity of wave-X and the complexity of the patterns it is separating.
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Is a Diametric formation Corrective or Impulsive? Also, in a rising market, does it indicate the trend will continue or does it indicate the rally is over?
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For adjacent waves to be considered the same degree, must they possess both elements (i.e., Price and Time) of the Rule of Similarity and Balance or just one of them?
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We all know how to calculate the "thrust" following a Contracting Triangle, but how does one calculate the "thrust" following Expanding and Neutral Triangles.
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Which works better, analyzing the smallest time frame and building up, or the largest time frame and working down?
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Are you keen on supplementing Wave theory with the works of W.D. Gann?
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When you set stops/targets, are you using electronic or U.S. pit sessions?
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When plotting Weekly charts, do you include the current, unfinished week?
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Why does Elliott Wave sometimes fail?
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How do you know when a wave pattern ends after a high or after a low?
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To apply NEoWave properly, how many bars should a chart contain?
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What do you think about Elliott oscillator use?
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Now that many markets trade 24-hours-a-day, how should I construct my charts?
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If the end of a correction occurs higher than the impulsion preceding it, how do you measure it for Fibonacci relationships?
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Can a 5th wave be a Diametric formation?
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Why do you sometimes trade contrary to your forecasts?
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How important is the "Overlap" rule and do you apply it strictly or loosely.
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What is the best and safest approach to trade an impulse wave? Many books say "exit at end of wave 1, reenter at low of 2, exit at end of 3, reenter during wave 4, exit at end of 5."
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When wave-4 is a Triangle, can any part "overlap" wave-1?
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In creating a wave chart, how do you decide to plot the high or low first?
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Why is analysis done with cash data and trading done with futures data?
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Can a Terminal impulse end with a 5th wave failure?
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What is the most productive/efficient time frame to trade to maximize profits/minimize losses?
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What is the most important thing in determining wave structure and where patterns begin and end?
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What should be the structure of smaller internal waves of a larger Impulse Wave?
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Can two impulsive (or corrective) patterns occur one after the other, on the same time frame?
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Should fibonacci relationships be measured in absolute numbers or the distance covered on a log scale?
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Do you measure Fibonacci relationships from the beginning to end of a wave or from high to low?
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In an Impulsive pattern, how important is the Rule of Extension?
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How much importance do you place on volume, open interest and other market data?
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In a Double Three Running Correction, how large can wave-X get?
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If a pattern looks like a 5-wave move, but lacks alternation, what does it mean?
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Does MEW cover all the ways the "Rule of Similarity and Balance" apply?
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How much detail (i.e., how many monowaves) should a chart contain?
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Which is best, cash or futures charts?
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You mention several ways to plot data in MEW, which is the best?
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How is wave structure impacted by dividends and interest payments or stock splits?
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How do you translate your cash wave analysis into a futures market trade?
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How do I know when a pattern starts higher than the low or lower than the high?
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What are the behavior traits that differentiate :F3`s from :5`s?
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What factors determine the classification of various Triangles?
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Is it possible to produce accurate market analysis without religiously applying Chapter 3 of MEW (Mastering Elliott Wave)?
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What would be the best approach for confirming the end of wave-5?
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What are the minimum requirements for wave-C following a running B-wave correction?
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What alerts you to the non-impulsive nature of a group of waves that many would misinterpret as impulsive?
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Under NEoWave theory, what is more important - structure or behavior?
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What`s the proof that a pattern ended at a certain point and at what time is NEoWave able to predict this?
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In an impulsion, can wave-2 take less time than wave-1 and can wave-4 take less time than wave-3?
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How many Triangle categories and variations exist under NEoWave theory?
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What is the difference between Elliott Wave and NEoWave?
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Should Daily charts verify Weekly structure or should Weekly structure guide Daily analysis?
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What are some reliable ways to identify degrees in wave formations?
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Is it possible for wave-b of a Zigzag to be shorter in time than both waves-a & c?
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Should a logarithmic or arithmetic chart be used for Elliott and NEoWave analysis?
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If structural conflict exists between a shorter and longer-term chart, which do you trust?
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Is it possible to predict the percentage wave-4 will retrace of wave-3 after wave-2 has ended?
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What is a NEoWave NEUTRAL Triangle?
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What specifc rules must be met for the application of an x-wave?
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What is NEoWave "Reverse Alternation" in a Triangle?
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What is a NEoWave SYMMETRICAL formation?
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Can wave-2 ever be a Triangle?
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What is a NEoWave Diametric Formation?
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What are the TIME limits for wave-b of a Flat?
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