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Elliott Wave Theory

On the chart is denoted by the numbers 12345. The most common driving wave model, which consists of five waves, three of which are trending and themselves, being the driving waves, have exactly the same internal structure. The other two waves are corrective and directed in the opposite direction from the trend. The internal structure of the impulse looks like 5-3-5-3-3-5 or 5-3-5-5-5-5.

- A pulse is always subdivided into five waves.
- Wave 1 is always a pulse or (rarely) an initial diagonal.
- Wave 2 is always a zigzag, a plane, or a combination.
- Wave 3 is always an impulse.
- Wave 4 is always a zigzag, plane, triangle, or a combination.
- Wave 5 is always an impulse or a finite diagonal.

- Wave 2 never goes beyond the base of wave 1.
- Wave 3 always goes beyond the top of wave 1.
- Wave 3 is never the shortest wave.
- Wave 4 never ends in the territory of wave 1.
- Waves 1, 3 and 5 are never stretched at the same time.
- Wave 4 significantly disrupts the trend channel formed by the sub-waves of wave 3.

- Wave 2 shifts the trend channel of wave 1 and at least enters the area of the previous wave 4 by a degree below.
- Wave 4 does not enter the territory of wave 1.
- Wave 4 shifts the channel 1-3, postponed from wave 2 and/or enters the area of the previous 4 to a lower degree.
- Wave 4 is almost always distinguished by a corrective pattern from wave 2. However, in real time, the 2/4 pulse interleaving norm is worth using as a rule of thumb.

- Wave 2 is usually a zigzag (single or double).
- Wave 4 is usually a plane, triangle, or a combination.
- Very rarely, wave 5 does not go beyond the end of wave 3 (truncation).
- The center of the wave, falling on the 3 parent impulse almost always has the steepest slope among waves 1 and 5 of the same degree. In some cases, the early part of wave 1 (the “initial roll”) may be steeper.
- Usually, one of the waves 1, 3 or 5 is usually stretched, which is manifested by the “stretching” of the wave. This is due to the fact that the corrective waves (2, 4) are small in comparison with the impulse waves (1, 3, 5). The stretched wave is significantly larger on the price scale and contains more internal subdivisions than the unstretched waves.
- Often the stretched sub-wave has the same number (1, 3, or 5) as the parent wave. This is how fractality appears. For example, if wave 5 of (3) impulse was stretched, then we should probably expect a stretched (5).
- Rarely two sub-waves are stretched at the same time, although it is typical for waves 3 and 5 of Cycle or Supercycle, which are in the fifth wave degree older.
- Wave 1 is very rarely extended.
- When wave 3 is elongated, waves 1 and 5 tend to be equal or related by a Fibonacci ratio.
- Wave 5 often ends near the upper line of the channel, drawn on the ends of waves 2-4, postponed from the end of wave 3 on an arithmetic or logarithmic scale.
- The extension of wave 5 is often in the Fibonacci ratio to the distance from the base of wave 1 to the top of wave 3, postponed from the end of wave 4.
- When wave 1 is stretched, it is often in the Fibonacci proportions to the distance from the base of wave 3 to the top of wave 5.
- Wave 4 often ends in the price territory of sub-wave 4 of wave 3.
- Wave 4 often divides the entire momentum in Fibonacci proportions by time and/or price.