The formation of waves over time

Alternation (Elliott waves)


1) The alternation rule

If wave 2 of an impulse is a deep retracement, wave 4 will often be a complex lateral correction, and vice versa.

A simple correction can be a flat correction or a zig-zag correction. A complex correction can be a triangle or a double three.




Depth (Elliott waves)


2) The depth of corrective waves

Corrective waves tend to retrace towards the end of sub-wave 4. This type of correction often appears during wave 4, and also if the first sub-wave of the impulse wave (wave 1 or 3) is an extension.

In the picture, you can see that wave 2 ends near the level of wave 1's fourth sub-wave.

A corrective wave has a duration lasting between .4 - 1 times the duration of the preceding wave, except if the correction is a triangle.

3) Trend tunnels

In order to visualise the probable bounces of the following impulse waves, it is recommended that you trace straight trend lines ahead of time.

In order to trace this trend tunnel, connect the ends of waves 2 and 4.

If waves 1 and 3 are regular, a straight line passing through the summit of wave 3 will allow you to predict the summit of wave 5.

A straight line drawn from the summit of wave 1 will be even more useful to determine the summit of wave 5 if wave 3 is very powerful (almost vertical).

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