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Category: Technical Analysis
When I try to use Elliott wave theory to analyze the market, candlestick chart and line chart can give me different patterns. Candlestick chart give me a three-wave pattern, but line chart give me a five-wave pattern. How do I know which one I should believe.

Responder: Message Board Staff	Date: 2/21/2013
Every chart time is a "filter" for market information. Some type of "filter" is mandatory; you can't get around it. And on occasion, you do have to step back and look at a longer term picture to be able to see the forest for the trees. The question is, how much data do you want to filter out in order to get a clear picture? True, sometimes an overlapping, choppy mess on a HLC bar chart will appear to be a clean five wave pattern when you only look at the closes on the same data. But is that an accurate representation of what the market actually did? And do you want to make a decision based upon that? Probably not. (Consider EWI's online, on-demand course "How to Trade the Highest Probability Opportunities: Price Bars and Chart Patterns" -- one of over 20 courses.)

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