Elliott Wave
Wave-based analysis strategies using impulse and corrective wave structures.
3 Strategy Templates
Elliott Wave Theory posits that markets move in self-similar five-wave impulse sequences in the primary trend direction, followed by three-wave (ABC) corrections against it. The theory is fractal. Every wave at one degree contains a complete five-or-three-wave cycle at the next degree down. which means wave counts must reconcile across multiple timeframes to be valid. The rules are strict: wave 2 cannot retrace more than 100% of wave 1, wave 3 cannot be the shortest impulse wave, wave 4 cannot overlap wave 1's price territory in most cases.
The strategies in this category target the two highest-probability moments in an Elliott cycle: the start of wave 3 (the longest and fastest impulse, offering 1.618× wave-1 extensions) and the completion of wave C in an ABC correction (where the primary trend resumes). Wave 5 divergence trades the opposite idea. Fading the final push when momentum indicators diverge against price. Elliott Wave has a strong track record in the hands of disciplined practitioners and a weak one when counts are forced onto unwilling markets; the difference is usually whether the trader accepts "no valid count exists right now" as a legitimate outcome. Combine Elliott counts with Fibonacci retracement/extension levels and volume confirmation for the most robust signals.
Capture the most powerful wave in Elliott structure. Wave 3 is typically the longest and strongest impulse wave.
After a strong 5-wave impulse completes, price enters a corrective ABC pattern. Enter on the completion of wave C (typically 0.618-1.272 of wave A) to catch the resumption of the primary trend.
Wave 5 of an Elliott impulse often terminates with momentum divergence. Price makes new extreme while RSI/MACD show weaker readings than wave 3. This signals trend exhaustion and potential ABC correct...