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2. Motive wave otherwise called Impulse wave, Corrective wave otherwise called
Zigzag wave
4. If any of the rules such as wave 3 in a motive is shorter than wave 1 or 5, then
check for the presence of an extension
5. If the 5th wave does not move beyond the end of 3rd wave it is called
truncation. Often 3rd wave is much larger than usual
6. 5th wave extensions, truncated 5ths and ending diagonal all imply the same thing
: dramatic reversal ahead.
1. Two main types - Motive and corrective, Motive - 5 wave and corrective - 3 wave.
1, 3, 5, A and C are motive. 2, 4 and B are corrective
3. Actionary and reactionary waves - All reactionary waves form in corrective mode,
but not all actionary waves form in impulse mode. Few actionary waves form in
corrective mode also, i.e. they subdivide into three waves or a variation thereof
10. Ending diagonal - It occurs primarily in the fifth wave position at times when
the preceding move has gone "too far too fast" as elliott put it. A very small
percentage of diagonals appear in the C-wave postion of A-B-C formations. In double
or triple threes they appear only as the final C wave. In all cases they are found
at the termination points of larger patterns, indicating exhaustion of the larger
movement. Ending diagonal appears in 2 forms - Contracting and Expanding
11. Leading diagonal - It appears in the wave 1 position of an impulses and in the
wave A position of Zigzags. It appears mostly in structure 3-3-3-3-3 although in
two cases it appeared in 5-3-5-3-5, so it is out of a strict definition. A leading
diagonal in the wave one position is typically followed by a deep retracement.
Leading diagonal appears in both forms - Contracting and Expanding. Expanding form
appears to occur primarily at the start of declines in the stock market (after
completion of impulse and in corrective A wave)
14. Flat (3-3-5) (More texts to read at pg no : 45) - A flat correction differs
from a zigzag in that the subwave sequence is 3-3-5. Since the first actionary
wave, wave A lacks sufficient downward force to unfold into a full five waves as it
does in a zigzag, the reactionary wave B not surprisingly seems to inherit this
lack of countertrend pressure and terminates near the start of wave A (See diagram
in pg no 45). Wave C in turn generally terminates just slightly beyond the end of
wave A rather than significantly beyond as in zigzags. Within an impulse, the
fourth wave frequently sports a flat, while the second wave rarely does. Double
flat does occur - elliott called it as a 'double-three'. There is a variety called
as 'expanded flat' which contains a price extreme beyond that of the preceding
impulse wave. Elliott called this variation as 'irregular flat' although the word
is inappropriate as they are actually far more common than 'regular' flats. In
expanded flats wave B of the 3-3-5 pattern terminates beyond the starting level of
wave A, and wave C ends more subtantially beyond the ending level of wave A. There
is a rare variation called 'running flat' in that wave B terminates well beyond the
beginning of wave A as in an expanded flat, but wave C fails to travel its full
distance falling short of the level at which wave A ended
15. Triangle (3-3-3-3-3) labeled as A-B-C-D-E (More texts in pg no: 49) - Triangle
usually reflects sideways movement that is usually associated with decreasing
volume and volatility. Three varieties of triangle - Contracting, expanding and
barrier. Most of the subwaves in a triangle are 'zigzags' but sometimes one of the
subwaves (usually wave C) is more complex than the others and can take the shape of
a multiple zigzag. In rare cases one of the sub-waves (usually wave E) is itself a
triangle, so that the entire pattern protracts into nine waves. Thus triangles,
like zigzags occasionally display a development that is equal to an extension
16. Combination (Double and triple three) (More on pg: 52) - Elliott called a
sideways combination of two corrective patterns a 'double three' and three patterns
a 'triple three'. For the most part combination is horizontal (sideways) in
character
17. Orthodox tops and bottoms (more on pg: 55) - Sometimes the patterns end differs
from the associated price extreme. In such cases, the end of the pattern is called
the 'orthodox top or bottom' in order to differentiate it from the actual price
high or low that occurs intra-pattern or after the end of the pattern
18. Labels - Labels for actionary waves are 1,3,5,A,C,E,W,Y and Z. Labels for
reactionary waves are 2,4,B,D and X. As stated earlier, all reactionary waves
develop in corrective mode, and most actionary waves develop in motive mode. The
preceding sections have described which actionary waves develop in corrective mode.
They are :
-- Waves 1,3 and 5 in an ending diagonal
-- Wave A in a flat correction
-- Waves A,C and E in a triangle
-- Waves W and Y in a double zig-zag and double-three
-- Wave Z in a triple zig-zag and a triple-three
Because the waves listed above are actionary in relative direction yet develop in
corrective mode, we term them "Actionary corrective" waves
19. Alternation within an impulse wave and corrective wave are mentioned in pg no :
63
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Practical-application-of-elliotts-wave-principles
2. Fibonacci Ratios are very important part if you want to use Elliott Wave Theory
5. Whenever you see “Irregular correction” in upside trend you must buy with
confidence and whenever you see it on downside you must sell it
2. At inner / lower degree, waves 1,3,5,A and C are impulsive (5 waves) whereas
waves 2,4 and B are corrective (3 waves)
3. Extended waves - Elliott mentioned that wave 5 is the main candidate for
extended wave but we usually see wave 3 extended in present markets
4. Failure wave (More on pg no: 21) - Failure wave is only applicable for wave 5.
Wave 5 called as failure when it fails to go above the end of wave 3
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Five-Waves-To-Financial-Freedom-Workbook
1. Waves 1, 3 and 5 are called impulse waves. Waves 2 and 4 are the corrective
waves. Once the five waves are completed, we will get a correction that will be
bigger than the two previous corrections because this downward move corrects not
just the fifth wave, but the entire set of five waves up. Once wave 5 was finished,
we got a down move that I have labeled a/b/c. Together, this set of abc is bigger
than both Wave 2 and 4 individually.
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Mastering-elliott-wave-principle-elementary-concepts-wave-patterns-and-practice-
exercises
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Glenn-neely-mastering-elliott-wave
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1. Waves 3, 5, A, and C are the most advantageous to trade, because they are
oriented in the direction of the one larger trend
Waves mentioned :
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1. Larger waves contain smaller waves, smaller waves contain even smaller waves and
this goes to infinity
3. Actionary waves are not always form only in motive mode, it forms in both motive
and corrective mode. Similarly reactionary waves are not always form only in
corrective mode, it forms in both motive and corrective mode
3. 7 types of corrective waves - zigzag, flat, double zigzag, triple zigzag, double
three, triple three, triangles
5. Ending diagonal - It appears in final wave - end of the wave position (Wave 5 of
an impulse or Wave C of an zigzag or flat). It always subdivides into 5 waves. Wave
formula is C-C-C-C-C (3-3-3-3-3). Wave 4 ends between Waves 1 and 2. Wave 5 is
either truncated or non-truncated.
6. Zigzag - It always subdivides into 3 waves. Wave formula M-C-M (5-3-5). Wave B <
Wave A. Wave C almost always ends beyond the end of Wave A. Zigzag usually is a
deep correction. Channel is drawn to predict the zigzag wave
7. Flat - It always subdivides into 3 waves. Wave formula C-C-M (3-3-5). Wave B is
often equal to Wave A. It is a horizontal correction (sideways). 3 types of flat -
Regular (All subwaves are equal), Expanding (Subsequent waves are larger than
previous wave), Running (Wave B > Wave A, Wave C < Wave B)
9. Double zigzag : Two zigzag connected with each other by corrective intervening
wave. It always subdivides into 3 waves. Wave formula C-C-C (3-1-3). Wave X < Wave
W. Wave Y is usually larger than Wave X and goes beyond the end of Wave W.
Sometimes Wave Y cannot move beyond the end of Wave W because of truncation but
usually truncation is very rare in double zig-zag. It is usually a deep correction.
When zigzag failed to make a deep correction in the market sometimes it is
compromised by double zig-zag. Easily fit into linear regression channel.
10. Triple zigzag : Three zigzag connected with each other by corrective
intervening wave. It always subdivides into 5 waves. Wave formula C-C-C-C-C (3-1-3-
1-3). Wave X < Wave W. Wave Y is usually larger than Wave X and goes beyond the end
of Wave W. Wave XX < Wave Y. Wave Z is usually larger than XX wave and goes beyond
the end of Wave Y. Sometimes Wave Z cannot move beyond the end of Wave Y because of
truncation but usually truncation is very rare in double zig-zag. It is usually a
deep correction. When zigzag and double zigzag failed to make a deep correction in
the market sometimes it is compromised by triple zig-zag. Easily fit into linear
regression channel.
11. Double three : Two threes connected with each other by corrective intervening
wave. It always subdivides into 3 waves. Wave formula C-C-C (3-3-3). Unlike zigzag
where Waves W and Y are mostly comes in the form of zigzag, here Waves W and Y can
take any form of corrective patterns. Wave W cannot take a triangle form. It is
usually a shallow correction. It is usually a long correction. Double and Triple
three are very often appear in the Wave 4 of an impulse
12. Triple three : Three threes connected with each other by corrective intervening
wave. It always subdivides into 5 waves. Wave formula C-C-C-C-C (3-3-3-3-3). It is
usually a shallow correction. It is usually a long correction.
14. Skewed triangles : It always subdivides into 5 waves. Wave formula C-C-C-C-C.
Wave < Wave B. Wave D > Wave C. Wave E < Wave D. The generating channel lines are
inclined in the direction of the trend. Can be in place of the penultimate Wave B
in A pattern of highest level i.e. it is always located in the place of the next to
the last wave in higher order pattern. Ex: Wave B in a zigzag, Wave 4 in an
impulse, Wave XX of a triple zigzag
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