📍Part #2, Elliott Waves: "Motive Waves - Impulse".
👩🏻💻Welcome to the 2nd lecture on Elliott Waves.
So, Elliott Wave Theory suggests that price behavior follows a wave structure, with three waves being impulse waves and 2 being corrective waves. It can be said that these 5 waves look like the image above.
➡️For example, let's take an upward impulse, where the impulse refers to all these five waves. We observe the first wave of growth, then the second wave is corrective to the first, meaning the second wave is specifically a correction for the first wave. Next, the third wave is a growth wave, the fourth is corrective for the third, and the fifth wave concludes the impulse. Following the completion of the impulse or the five-wave sequence, a correction occurs in the form of A, B, C.
➡️This entire structure is fractal, meaning that if our upward impulse has three waves, and they are also impulse waves, such as the first, third, and fifth, and as impulse waves, as we already know, consist of five waves, then each impulse within this larger five-wave sequence has the same structure of five waves. Furthermore, in the correction A, B, C, waves A and C also have a five-wave structure, but more on that in the next lessons.
➡️If you ask about the timeframes to work with waves, I would say that the 1-hour timeframe is the threshold below which it is not recommended to consider the structure!
Next, I will describe the basic rules and regulations concerning impulses in the form of pictures, which are convenient to save and use as a hint when analyzing charts.
➡️Now let's consider some rules that are mandatory for all impulse movements.
Rules
An impulse always subdivides into five waves.
Strong guidelines
📍Wave A almost always will alternate with wave B. Alternation can be expressed in two ways:
1) In the type of correction: sharp/sideways or vice versa
2) In the presence of extension: in waves 2 and 4 of the impulse, two sideways patterns are possible, but only one of them will have an extreme beyond the peak of the previous wave.
📍Wave 4, as a rule, significantly violates the channel formed by the subwaves of wave 3.
📍As a strong norm, no part of wave 4 should enter the price territory of wave 1 or 2.
📍As a strong norm, the peak of wave 4 should not extend beyond the doubled channel constructed from the peaks of waves 1, 2, and 3, while the midline of the channel will serve as the minimum achievable target.
📍Second waves of impulses tend to go beyond the previous fourth wave. When using this norm, the previous fourth wave serves as the minimum target.
📍Sometimes wave 5 does not move beyond the end of wave 3 (in which case it is called a truncation).
📍Often, waves 1 and 5 of the impulse form impulses, but more often they alternate in the type of motive waves: if wave 1 is an impulse, expect wave 5 in the form of a diagonal, and vice versa. Less commonly, waves 1 and 5 form diagonals, but in this case, alternation will be expressed in the form of a pattern: contracting/expanding.
So there are also many other lesser indications, but they are too numerous and less frequent.
Therefore, I recommend that we focus on the main ones for the time being.
📣This concludes the lecture on impulse waves. Save the images and practice.
Next week I'll start talking about the Leading and Ending diagonals.
🔔Links to other lessons in related ideas.🔔
So, Elliott Wave Theory suggests that price behavior follows a wave structure, with three waves being impulse waves and 2 being corrective waves. It can be said that these 5 waves look like the image above.
➡️For example, let's take an upward impulse, where the impulse refers to all these five waves. We observe the first wave of growth, then the second wave is corrective to the first, meaning the second wave is specifically a correction for the first wave. Next, the third wave is a growth wave, the fourth is corrective for the third, and the fifth wave concludes the impulse. Following the completion of the impulse or the five-wave sequence, a correction occurs in the form of A, B, C.
➡️This entire structure is fractal, meaning that if our upward impulse has three waves, and they are also impulse waves, such as the first, third, and fifth, and as impulse waves, as we already know, consist of five waves, then each impulse within this larger five-wave sequence has the same structure of five waves. Furthermore, in the correction A, B, C, waves A and C also have a five-wave structure, but more on that in the next lessons.
➡️If you ask about the timeframes to work with waves, I would say that the 1-hour timeframe is the threshold below which it is not recommended to consider the structure!
Next, I will describe the basic rules and regulations concerning impulses in the form of pictures, which are convenient to save and use as a hint when analyzing charts.
➡️Now let's consider some rules that are mandatory for all impulse movements.
Rules
An impulse always subdivides into five waves.
Strong guidelines
📍Wave A almost always will alternate with wave B. Alternation can be expressed in two ways:
1) In the type of correction: sharp/sideways or vice versa
2) In the presence of extension: in waves 2 and 4 of the impulse, two sideways patterns are possible, but only one of them will have an extreme beyond the peak of the previous wave.
📍Wave 4, as a rule, significantly violates the channel formed by the subwaves of wave 3.
📍As a strong norm, no part of wave 4 should enter the price territory of wave 1 or 2.
📍As a strong norm, the peak of wave 4 should not extend beyond the doubled channel constructed from the peaks of waves 1, 2, and 3, while the midline of the channel will serve as the minimum achievable target.
📍Second waves of impulses tend to go beyond the previous fourth wave. When using this norm, the previous fourth wave serves as the minimum target.
📍Sometimes wave 5 does not move beyond the end of wave 3 (in which case it is called a truncation).
📍Often, waves 1 and 5 of the impulse form impulses, but more often they alternate in the type of motive waves: if wave 1 is an impulse, expect wave 5 in the form of a diagonal, and vice versa. Less commonly, waves 1 and 5 form diagonals, but in this case, alternation will be expressed in the form of a pattern: contracting/expanding.
So there are also many other lesser indications, but they are too numerous and less frequent.
Therefore, I recommend that we focus on the main ones for the time being.
📣This concludes the lecture on impulse waves. Save the images and practice.
Next week I'll start talking about the Leading and Ending diagonals.
🔔Links to other lessons in related ideas.🔔
Related Ideas
📍 Part 3. Motive Waves - Leading & Ending Diagonals will be released on 03/23/2024!
Stay tuned for more updates!