Summer School

Question 1

Who is the founder of the Elliot Wave Theory?

Answer 1

Ralph Nelson Elliott

Question 2

What do you call the repetitive upward and downward price swings caused by the market’s collective psychology?

Answer 2

waves

Question 3

The Elliott Wave Theory was first published in a book entitled ______.

Answer 3

The Wave Principle

Question 4

Waves 2 and 4 are called ________ waves.

Answer 4

corrective

Question 5

Waves 1, 3, and 5 are called _______ waves.

Answer 5

motive

Question 6

People started labeling the ____ wave as the extended one as it tends to be longer than the other motive waves.

Answer 6

third

Question 7

There are ____ types of ABC corrective patterns.

Answer 7

21

Question 8

True or False: Triangle ABC corrective patterns are simple sideways corrective waves.

Answer 8

False

Question 9

True or False: A Minor wave is made up of Minute waves.

Answer 9

True

Question 10

What does TRUNCATION mean?

Answer 10

Wave 5 does not move beyond the end of Wave 3

Question 11

Wave 2 cannot go beyond the start of Wave 1.

Answer 11

Always true

Question 12

Waves 2 and 4 bounce off Fibonacci retracement levels.

Answer 12

Sometimes true

Question 13

The first wave in the 5-3 wave pattern is called the _______.

Answer 13

Impulse wave

Question 14

Name the three fundamental corrective wave patterns.

Answer 14

flats, zig-zags, and triangles

Question 15

What do you call the three legs of a Three-Drive pattern?

Answer 15

Drives

Question 16

Which trading tool should you use to spot ABCD and Three-Drive patterns?

Answer 16

Fibonacci

Question 17

How does the Gartley Pattern differ from the ABCD Pattern?

Answer 17

A Gartley Pattern is an ABCD Pattern preceded by a significant high or low

Question 18

A harmonic price pattern that allows you to put a very tight stop loss, and is considered the most accurate.

Answer 18

Crab

Question 19

Discovered by Byrce Gilmore, this harmonic price pattern is defined by the .786 retracement of move AB with respect to move XA

Answer 19

Butterfly

Question 20

A harmonic price pattern defined by the .886 retracement of move XA as Potential Reversal Zone.

Answer 20

Bat

Question 21

Which of the following is NOT a harmonic price pattern?

Answer 21

The Carney Pattern

Question 22

What do you do after you locate a potential harmonic price pattern?

Answer 22

Measure the potential harmonic price pattern

Question 23

Divergences can be spotted by comparing…

Answer 23

price action and an indicator

Question 24

What are the two types of divergences?

Answer 24

Regular and Hidden

Question 25

Which type of divergence usually signals a trend reversal?

Answer 25

Regular Divergence

Question 26

In a regular bullish divergence, if price is making lower lows, the oscillator should be making..

Answer 26

higher lows

Question 27

What kind of divergence is formed when price makes higher highs while the oscillator makes lower highs?

Answer 27

Regular bearish divergence

Question 28

Why are hidden divergences called such?

Answer 28

Because they are hiding in the current trend

Question 29

What do hidden divergences signal?

Answer 29

Trend continuation

Question 30

In a hidden bearish divergence, if price is making lower highs, the indicators should be making..

Answer 30

Higher highs

Question 31

When do hidden bullish divergences normally form?

Answer 31

Uptrend

Question 32

Which among these shouldn’t be combined with divergence trading?

a. Candlesticks
b. Trend lines
c. Support and resistance
d. None of the above

Answer 32

None of the above

Question 33

Which is part of the momentum trick in confirming a divergence?

Answer 33

Both

Question 34

True or False: If both price and the oscillator break their respective trend lines, it could indicate that a new trend is forming.

Answer 34

True

Question 35

In order for a divergence to exist, price must’ve formed either of the following except:

a. Double Top
b. Higher highs
c. Consolidation

Answer 35

Consolidation

Question 36

True or False: It’s okay if the bottoms or tops you connect aren’t consecutive. As long as one is higher or lower, it’s a valid divergence.

Answer 36

False

Question 37

True or False: In looking for divergences, you should focus on the tops and bottoms and forget about everything else.

Answer 37

True

Question 38

Which among these isn’t one of the “9 Rules for Trading Divergences”?

a. Must use stochastics only as the indicator
b. Draw lines on successive tops and bottoms
c. Keep in line

Answer 38

Must use stochastics only as the indicator

Question 39

True or False: Divergences should be used as an indicator, not as a signal to enter a trade.

Answer 39

True