Intraday Elliott Wave Pattern in BAC 02/27/2009

Learning to recognize an Elliott Wave pattern as it unfolds can help traders forecast future price movements. Looking at past patterns that have already appeared will help train you so that you will know what to watch for at any given time.

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I previously wrote about a successful quick scalping trade I made using BAC on February 27, 2009. Later on in the evening after the markets closed that day, I picked up a book to do some reading. The book, or booklet in this case, was about Elliott Wave analysis.

As I was reading, my wife asked me why it was taking me so long to read this little booklet. She asked me this because I had been reading it for a couple of nights in a row, and was only halfway through the booklet. I told her that the information in this particular booklet was interesting to me and at the same time provides information that can be very complex, at least if you want to remember, understand and be able to put it to good practical use. (I tried to show her with no luck).

Anyway, I woke up the next morning and as I was looking at a chart of BAC which I had traded the prior day, I recognized a pattern that was familiar to me. It was from the booklet I had been reading the night before. I guess I really did learn something from this booklet! Here is the chart where I recognized the pattern:

Elliott Wave Recognition

Now if you don't have any knowledge of Elliott Wave or hadn't been reading the same booklet that I was recently, the pattern I noticed may not stand out to you. And even you do have some knowledge, I am still learning about Elliott Wave so feel free to correct me or provide your comments below.


Since I am continuing to learn about Elliott Wave every day, some of the terms I may use here or labeling in relation to specific degrees involved with my analysis may be incorrect here. I still feel though, that the basis of my recognition can be helpful and is able to be built upon, which is why I added this page.

Let's zoom in to the exact area where I spotted the Elliott Wave pattern in the above chart. I have included labels to help understand what I was looking at:

Elliott Wave Pattern

Here are some Elliott Wave guidelines (that I read the night before in my booklet) that were met in which alerted me to this particular pattern:

  • Consists of five waves labeled on my chart as 1-5.
  • Wave 2 is a Sideways Corrective Wave appearing as a Contracting Triangle.
  • Wave 3 is a larger percentage move compared with Wave 1, and eventually Wave 5.
  • Wave 4 is a Corrective Wave and since Wave 2 was a Sideways Corrective Wave, Wave 4 is also a predictable sharp single decline compared to Wave 2.
  • Wave 4 also does not enter the price level of Wave 1.

While I was not watching in real time as this pattern unfolded, I very well could have been. Since I regularly participate in trades that last a few minutes or less, seeing this unfold and recognizing it would have produced several trading opportunities.

While no patterns appear perfectly like a textbook every time (such as Wave C above which did not decline to the lower support level), learning about guidelines and variations of these guidelines will enable you to increase the number of patterns you recognize. Free Elliott Wave Video Lessons here:

As I am writing this page and proofreading it, I have now noticed another Elliott Wave on the first chart above. Here is the additional pattern I recognized:

Elliott Wave Pattern

Here are some guidelines that I recognized for this one:

  • Consists of five waves labeled on my chart as 1-5.
  • Wave 2 is a Sideways Corrective Wave appearing as an Ascending Triangle.
  • Wave 3 is a larger percentage move compared with Wave 1, and eventually Wave 5.
  • Wave 4 is a Corrective Wave and since Wave 2 was a Sideways Corrective Wave, Wave 4 is also a predictable sharp single rise compared to Wave 2.
  • Wave 4 also does not enter the price level of Wave 1.
  • Wave 5 appears to be a Truncation.

Once you become familiar with these patterns, you can zoom in to each Wave and see the same types of characteristics. This is what is meant by "patterns repeat and are recognizable at different degrees".

Looking at examples like this and others will help you to recognize the same patterns in real time. You will also find out that these same patterns are recognizable at many different degrees, such as using minute, hourly, daily, weekly and monthly charts to name a few.

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