This is the wave count.
Zigzags upward aren’t always waves and you can’t nilly willy use EWT to make what looks good a wave count.
1. Wave 1: The first wave is the initial move in the direction of the new trend (up in a bull market, down in a bear market).
2. Wave 2: The second wave is a correction that retraces part of Wave 1 but never moves beyond the starting point of Wave 1 (e.g., in an uptrend, it doesn’t drop below the low where Wave 1 began).
3. Wave 3: The third wave is typically the strongest and longest, moving in the trend direction, and it must extend beyond the end of Wave 1. It cannot be the shortest of Waves 1, 3, or 5.
4. Wave 4: The fourth wave is another correction that retraces part of Wave 3 but cannot overlap with the price territory of Wave 1 (e.g., in an uptrend, Wave 4’s low doesn’t drop into Wave 1’s high).
5. Wave 5: The fifth wave is the final move in the trend direction, completing the impulse, and it must extend beyond the end of Wave 3.
Key Notes
• An impulse wave consists of 5 waves: 3 trending waves (1, 3, 5) and 2 corrective waves (2, 4).
• After a 5-wave impulse, a corrective phase follows with 3 waves (labeled A, B, C) moving against the trend.
• These rules apply strictly to impulse waves; corrective waves have more flexibility but follow their own guidelines (e.g., zigzags, flats, triangles).
Zigzags upward aren’t always waves and you can’t nilly willy use EWT to make what looks good a wave count.
1. Wave 1: The first wave is the initial move in the direction of the new trend (up in a bull market, down in a bear market).
2. Wave 2: The second wave is a correction that retraces part of Wave 1 but never moves beyond the starting point of Wave 1 (e.g., in an uptrend, it doesn’t drop below the low where Wave 1 began).
3. Wave 3: The third wave is typically the strongest and longest, moving in the trend direction, and it must extend beyond the end of Wave 1. It cannot be the shortest of Waves 1, 3, or 5.
4. Wave 4: The fourth wave is another correction that retraces part of Wave 3 but cannot overlap with the price territory of Wave 1 (e.g., in an uptrend, Wave 4’s low doesn’t drop into Wave 1’s high).
5. Wave 5: The fifth wave is the final move in the trend direction, completing the impulse, and it must extend beyond the end of Wave 3.
Key Notes
• An impulse wave consists of 5 waves: 3 trending waves (1, 3, 5) and 2 corrective waves (2, 4).
• After a 5-wave impulse, a corrective phase follows with 3 waves (labeled A, B, C) moving against the trend.
• These rules apply strictly to impulse waves; corrective waves have more flexibility but follow their own guidelines (e.g., zigzags, flats, triangles).
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.