Scenario Tree
Elliott Wave Theory glossary · Elliott Wave Theory
Definition
Professional practice of maintaining multiple wave-count scenarios (preferred, alternate 1, alternate 2) with specific trigger levels for each.
Scenario Tree in plain English
Nobody can know for certain which wave the market is in right now, so smart analysts don't bet everything on one guess. A scenario tree is just keeping a short ranked list of possibilities — your best guess (the 'preferred' count) plus one or two backups — and deciding in advance what price would prove each one right or wrong. It's like planning a road trip with a main route but two detours already mapped, so a roadblock doesn't leave you stranded. The key discipline is setting those 'trigger levels' ahead of time, so you react by plan instead of panic when the market surprises you.
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