An Elliott Wave Notation Scheme for the Rest of Us

A while back, we solicited suggestions for what the "best" Elliott Wave annotation scheme was so that we could add it to our charting tools.  Here's what we learned: Elliott Wave aficionados use a W-I-D-E variety of techniques and they are very passionate when they say that "Mine is the best!"

So that put us into a difficult spot.  With no clear-cut winner in the debate, we needed to come up with a f-l-e-x-i-b-l-e scheme that would satisfy as many people as possible.  I wasn't sure we were going to find a solution, but then I got an email from Tom Denham.

Tom Denham is the Senior European Stocks Analyst for Elliott Wave International.  (For those that don't know, EWI is headed by Bob Prechter, one of the top Elliott Wave analysts out there today.)  Tom sent along something he calls "An Elliott Wave Labeling Convention for Everybody."  Here's how Tom described it:

"An annotation convention should use ordinary fonts that are available to everyone. The Elliott Wave annotations of the largest publisher of Elliott Wave charts in the world, Elliott Wave International (EWI), is not suitable for general use because EWI uses a proprietary “circle” font for some labels to set the company’s work apart from the work of other publishers. However, because the EWI convention is familiar to so many people, a general-use convention should stay close to EWI’sapproach. The annotation scheme proposed here keeps all elements of the EWI scheme except that double parentheses are used around numbers and letters where EWI uses circle fonts."

We certainly were struggling with the whole circle-font issue.  There are some technical challenges that were preventing us from mimicking that convention effectively.  Also, because of the wide variations in Elliott Wave annotations that our users sent us, we wanted to create a solution that allowed people to easily customize their annotations rather than be forced into one specific set of symbols - and that meant we wanted our Elliott Wave annotations to be created as text annotations.  Once they are placed on a chart, they can be edited just like any other text object.

Needless to say, Tom's convention was very appealing to us.  Unfortunately, EWI never officially adopted this convention - Prechter wanted to use circle fonts to be "different" - but Tom feels, as do I, that this convention can be very useful in many situations.  For those reasons, we have decided to adopt it as our "default" Elliott Wave annotation convention (keeping in mind that it can be easily changed).

Here's a table showing what "An Elliott Wave Labeling Convention for Everybody" looks like:

Grand Supercycle     ((I)), ((II)), ((III))), ((IV)), ((V)), ((a)), ((b)), ((c))
Supercycle                 (I), (II), (III), (IV), (V), (a), (b), (c)
Cycle                          I, II, III, IV, V, a, b, c

Primary                      ((1)), ((2)), ((3)), ((4)), ((5)), ((A)), ((B)), ((C))
Intermediate                (1), (2), (3), (4), (5), (A), (B), (C)
Minor                            1, 2, 3, 4, 5, A, B, C

Minute                        ((i)), ((ii)), ((iii)), ((iv)), ((v)), ((a)), ((b)), ((c))
Minuette                      (i), (ii), (iii), (iv), (v), (a), (b), (c)
Subminuette                 i, ii, iii, iv, v, a, b, c

Micro                                  ((1)), ((2)), ((3)), ((4)), ((5)), ((A)), ((B)), ((C))
Submicro                            (1), (2), (3), (4), (5), (A), (B), (C)
Miniscule                             1, 2, 3, 4, 5, A, B, C

(The colors are optional.)

This is the convention that the new version of our ChartNotes annotation tool will support by default when it is released later this month.  I want to thank Tom for sending it to us and I want to thank everyone who sent us feedback on this issue earlier.

- Chip

P.S.  We hope to have a "Beta" version of ChartNotes with this new Elliott Wave Annotation tool available very soon.  Watch the "What's New" area of the homepage for an announcement.