For distortions of the ideal structure. Elliott formed a consistent system of triangles, diagonals, irregular corrections and wave extensions. Since distorted waves can follow each other, their detection becomes extremely difficult-to-read. And
this is the reason why Elliott could make surprising and extremely accurate predictions on the one hand at times. whereas he failed at others. Distorted waves are known ex post. but not in advance. But correct detection of distorted waves as such helps to predict the next waves ending. If this wave is distorted again, reasoned by whatsoever, prediction failed again to some extent. This offers opportunity to critics to claim invalidity of results, which is to some extent true, but which does not necessarily mark the whole system as nonsense, since the next forecast might be extremely correct. Thus the system can be right in the long-run, but the investor might suffer from distortions in the short run. Actually, only comouter-testina could prove if it is possible to make money with the system. (Hence that todays knowledge about pattern recognition often refers to similar ideas, yet named differently and more modern). Moreover the critics should be aware, that even the best traders are right three to four out often bets, and never know why they were wrong. Elliott Waves can make you know why you failed, which includes a kind of element of self learning. Now after having introduced the basic structure it might be interesting to conclude similarities to modern theories. First of
1Э
to inhere — подразумевать
ae self-similarity — самоподобие
э: ei interpritation - интерпретация
i: to delete — стирать, удалять
all, the system inheres self-similarity, which is in the meanwhile well-introduced by chaos-theory approaches to financial markets.
Secondly there are similarities to modem pattern recogntion. since a five wave structure simply is—a pattern.
Thirdly, Fibonacci time series are quite modern as well and Elliott himself found the similarities astonishing:
"From my experience I have learned that 144 is the highest number of practical value. In a complete cycle of the shock market, the number of Minor waves is 144, as shown in the following table.
