## Elliott-Wave Principle Basics

### Motive Wave:

### Elliott-wave Basic Fractal Pattern

#### Rules:

- Impulsive Waves always divide into 5 waves: Waves 1,2,3,4,& 5; followed by a corrective wave, typically A, B & C.
- The waves that are numbered (1,2,3,4,5) are in the direction of the Trend.
- The waves that are Lettered (A, B, C ) are against the Trend.
- Structure = 5-3-5-3-5 (21) followed by 5-3-5 (13)
- Wave 1 could divide into an impulsive 5 wave or a Leading Diagonal.
- Wave 3 is always an Impulsive 5 wave and is never the shortest wave.
- Waves 5 & C are always 5 waves but it could be an Ending Diagonal.
- Wave 2, 4 and B always subdivide in 3 wave corrections.
- Wave 2 Never moves beyond origin of Wave 1.
- Wave 3 must go beyond Wave 1.
- Wave 4 never moves into wave 1 range.
- Wave A can be a three wave structure or Leading Diagonal.
- Wave 5 often goes beyond Wave 3, if not it is called "Truncation".
- The Chart shows a bull Market. For a Bear Market the chart can be flipped and all the rules remain the same.
- The same pattern can be viewed in all time frames: Thick Charts, 1 min, 2 min, 3 min, 5 min, 10 min, 15 min, 30 min, 1 h, 4h, Daily, Weekly, Monthly Charts etc...

#### Guidelines:

- Waves 2 & 4 will almost always
**Alternate**into ZigZags, Flats, or Combos. - Wave 4 can be Flats, Triangles or Combinations
- Wave 2 which is usually ZigZag or a ZigZag combination.
- Wave 4 Usually Terminates in the same area as the Previous Wave 4 of Wave 3.
- Typical Fib counts for Wave 2 is 50%, 61.8% of Wave 1.
- Typical Fib Count of Wave 4 is 38.2% or 61.8% of wave 3.
- See the charts for other Fibonacci relations.
- Often Waves ad-hear to the laws of Channeling:
- 5 ends around the Chanel line extension of endpoints of 1-3, and
- Wave 4 may end at the parallel line point 1-3. (please look at the charts)

### Impulse Wave Extensions

#### Rules & Guidelines:

- Same As Motive waves mentioned above:

#### Extended Guidelines:

- Waves 1, 3 OR 5 can be subdivided further to be Extended.
- When Extended, the subdivisions are exaggerated, resulting into an elongated Impulse .
- Usually only one of the three (1,3, OR 5) is only Extended.
- In case of "Cycle" and "Supercycle", both Waves 3 & 5 are Extended.
- Waves 3 or 5 are the most common extensions.
- If Wave three is Extended, then Waves 1 & 5 are usually proportionally similar.
- If Wave 1 is Extended, then Wave 5 usually terminates around the Fibonacci 61.8% of Wave 1.
- If Wave 5 is Extended, Then it usually terminates around the Fibonacci 161.8% of Wave 3.

### Leading Diagonal

#### Rules:

- Diagonals are always 5 wave structures.
- Structure = 3-3-3-3-3 or 5-3-3-3-3
- Leading Diagonals happen in Wave 1 of an Impulse or Wave A of a ZigZag.
**Wave 2 & 4 always subdivide in ZigZag corrections.**- Wave 2 Never moves beyond origin of Wave 1.
- Wave 3 must go beyond Wave 1.
**Wave 4 must move into wave 1 range but not beyond Wave 2.****Wave 5 must go beyond Wave 3, there should be no "Truncation".**- In Contracting Diagonals, Wave 3 is always shorter than Wave 1, Wave 4 Shorter than Wave 2, and Wave 5 shorter than Wave 3.
- In Expanding Diagonals, Wave 3 is always longer than Wave 1, Wave 4 longer than Wave 2, and Wave 5 longer than Wave 3.

#### Guidelines:

- Wave 1, 3 & 5 are usually divided in ZigZags but may also be an Impulse wave.
- If Waves 1 is a Leading Diagonal, then Wave 3 is Usually Extended.
- Connecting ends of Waves 1-3 and 2-4 form Contracting or Expanding Wedges.
- In a Contracting Diagonal, Wave 5 Usually ends beyond the Wedge Line of Wave 1-3 ("Throw-Over") .
- In an Expanding Diagonal, Wave 5 stops just short of reaching the Wedge Line of Wave 1-3.
- Please see the chart for more favorable Fibonacci counts for possible Wave terminations.

### Ending Diagonal

#### Rules:

- Diagonals are always 5 wave structures.
- Structure = 3-3-3-3-3
- Ending Diagonals happen in Wave 5 of an Impulse or Wave C of a ZigZag or Flat Corrections.
**Wave 1, 2, 3, 4 & 5 always subdivide in ZigZag corrections.**- Wave 2 Never moves beyond origin of Wave 1.
- Wave 3 must go beyond Wave 1.
- Wave 4 must move into wave 1 range but not beyond Wave 2.
- Wave 5 Stop before reaching end of Wave 3: "Truncation".
- In Contracting Diagonals, Wave 3 is always shorter than Wave 1, Wave 4 Shorter than Wave 2, and Wave 5 shorter than Wave 3.
- In Expanding Diagonals, Wave 3 is always longer than Wave 1, Wave 4 longer than Wave 2, and Wave 5 longer than Wave 3.

#### Guidelines:

- Wave 1, 3 & 5 are usually divided in ZigZags but may also be an Impulse wave.
- In an Impulse, if Wave 3 is not an Extended, then Wave 5 is unlikely to become an Ending Diagonal.
- Connecting ends of Waves 1-3 and 2-4 form Contracting or Expanding Wedges.
- In a Contracting Diagonal, Wave 5 Usually ends beyond the Wedge Line of Wave 1-3 ("Throw-Over") .
- In an Expanding Diagonal, Wave 5 stops just short of reaching the Wedge Line of Wave 1-3.
- Please see the chart for more favorable Fibonacci counts for possible Wave terminations.

### Expanding Diagonal

#### Rules:

- Diagonals are always 5 wave structures.
- Structure = 3-3-3-3-3
- Ending Diagonals happen in Wave 5 of an Impulse or Wave C of a ZigZag or Flat Corrections.
**Wave 1, 2, 3, 4 & 5 always subdivide in ZigZag corrections.**- Wave 2 Never moves beyond origin of Wave 1.
- Wave 3 must go beyond Wave 1.
- Wave 4 must move into wave 1 range but not beyond Wave 2.
- In an Expanding Ending Diagonal Wave 5 must go beyond the end of Wave 3: No "Truncation".
- In Contracting Diagonals, Wave 3 is always shorter than Wave 1, Wave 4 Shorter than Wave 2, and Wave 5 shorter than Wave 3.
- In Expanding Diagonals, Wave 3 is always longer than Wave 1, Wave 4 longer than Wave 2, and Wave 5 longer than Wave 3.

#### Guidelines:

- Wave 1, 3 & 5 are usually divided in ZigZags but may also be an Impulse wave.
- In an Impulse, if Wave 3 is not an Extended, then Wave 5 is unlikely to become an Ending Diagonal.
- Connecting ends of Waves 1-3 and 2-4 form Contracting or Expanding Wedges.
- In a Contracting Diagonal, Wave 5 Usually ends beyond the Wedge Line of Wave 1-3 ("Throw-Over") .
- In an Expanding Diagonal, Wave 5 stops just short of reaching the Wedge Line of Wave 1-3.
- Please see the chart for more favorable Fibonacci counts for possible Wave terminations.

* *

### Corrective Wave:

### ZigZag

#### Rules:

- ZigZag is always a 3 wave structure.
- Structure = 5-3-5
- Wave B never move beyond the start of Wave A.
- Wave B is subdivided into a three wave pattern: zigzag, flat, triangle or any combination thereof.
- Wave A can be either an Impulsive wave or a Leading Diagonal.
- Wave C can subdivide into 5 wave structures: a Diagonal or an Impulse wave.

#### Guidelines:

- Waves A and C connected is usually parallel to the Line connecting the origin of the ZigZag to point B.
- Waves A and C usually are Equal in length.
- Wave A and C are more often subdivided into an Impulse Wave.
- Wave C is always ended beyond Wave A.
- Besides Waves A & C usually being equal, the ratios in a correction are less accurate than in an Impulse Waves 1,3 & 5.
- See the chart for Typical Fibonacci Retracements.

### Regular Flat

#### Rules:

- Flats are always a 3 wave structure.
- Wave A is a three wave pattern and never a Triangle.
- Wave B is subdivided into a three wave pattern.
**Wave B retraces to at least 90% of Wave A.**- Wave C always subdivide into 5 wave structures: a Diagonal or an Impulse wave.

#### Guidelines:

- Waves A and C connected usually is parallel to the Line connecting the origin of the ZigZag to point B.
- Waves A and C usually are Equal in length.
- Wave C is always ended around the end of Wave A.

### Running Flat

#### Rules:

- Flats are always a 3 wave structure.
- Structure = 3-3-5
- Wave A is a three wave pattern and never a Triangle.
- Wave B is subdivided into a three wave pattern.
**Wave B retraces to at least 105% of Wave A & typically up to the 138.2%.****Wave C does not go beyond Wave A and is "Truncated".**- Wave C always subdivide into 5 wave structures: a Diagonal or an Impulse wave.

#### Guidelines:

- Waves A and C connected usually is parallel to the Line connecting the origin of the ZigZag to point B.
- Waves A and C usually are Equal in length.

### Expanded Flat

#### Rules:

- Flats are always a 3 wave structure.
- Wave A is a three wave pattern and never a Triangle.
- Structure = 3-3-5
- Wave B is subdivided into a three wave pattern.
**Wave B retraces to at least 105% of Wave A & typically up to the 138.2%.****Wave C always goes beyond Wave A.**- Wave C always subdivide into 5 wave structures: a Diagonal or an Impulse wave.

#### Guidelines:

- Waves C usually goes between the 100% to the 161.8% of Wave A.
- Waves A and C usually are not Equal in length.

### Barrier Triangle

#### Rules:

- In a Triangle, the waves always subdivide into 5 waves: A, B, C, D, & E.
- Wave A never goes beyond the origin or point X.
- Structure = 3-3-3-3-3
- At least four of the five waves subdivide into a zigzag or a combination of zigzags.
- Triangles do not have more than one complex subwave (only one Double or Triple).
- One of the five waves can subdivide into an Impulse
**In a Barrier Triangle, Wave C never goes beyond Wave A, & Wave E never moves beyond C.****In a Barrier Triangle, Wave D ends around Wave B, forming a straight flat line or Barrier.**

#### Guidelines:

- Wave B may go beyond the start of Wave A; it is not common and it is called a Running Triangle.
- A Wave 5 following a Barrier Triangle can either be sharp, short and brief; or turn into an Extended Wave 5.
- Barrier Triangles are less common than a Contracting Triangle.

### Contracting Triangle

#### Rules:

- In a Triangle, the waves always subdivide into 5 waves: A, B, C, D, & E.
- Wave A never goes beyond the origin or point X.
- Structure = 3-3-3-3-3
- At least four of the five waves subdivide into a zigzag or a combination of zigzags.
- Triangles do not have more than one complex subwave (only one Double or Triple).
- One of the five waves can subdivide into an Impulse
**In a Contracting Triangle, Wave C never goes beyond Wave A, Wave D never moves beyond Wave B & Wave E never moves beyond C.****In a Contracting Triangle, Wave E ends around Wave A-C Line, but typically undershoots or overshoots the line.**

#### Guidelines:

- Wave B may go beyond the start of Wave A; it is not common and it is called a Running Triangle.
- A Wave 5 following a Triangle can either be sharp, short and brief; or turn into an Extended Wave 5.
- Contracting Triangles are the most common type of a Triangle.

### Expanding Triangle

#### Rules:

- In a Triangle, the waves always subdivide into 5 waves: A, B, C, D, & E.
- Wave A never goes beyond the origin or point X.
- Structure = 3-3-3-3-3
- At least four of the five waves subdivide into a zigzag or a combination of zigzags.
- Triangles do not have more than one complex subwave (only one Double or Triple).
- One of the five waves can subdivide into an Impulse
**In a Contracting Triangle, Wave C goes beyond Wave A, Wave D moves beyond Wave B & Wave E moves beyond C.****In a Contracting Triangle, Wave E ends around Wave A-C Line, but typically undershoots or overshoots the line.**- B,C & D always go beyond 100% of the proceeding subwave but never exceed 150%.

#### Guidelines:

- Wave B may go beyond the start of Wave A; but doe not have to do so.
- Expanding Triangles are the least common type of a Triangle.

### Double

Rules:

- Doubles are made of two corrective patterns joined by one corrective structure in the opposite direction labeled"X".
- Doubles labeling: "W" for the first Pattern, followed by the "X", and then "Y" for the ending pattern.
- Two ZigZags result into a Double ZigZag combination.
- Double ZigZags take the place of a ZigZag in a corrective move.
- "Double Three" can be any of the following: ZigZag and a Flat; Flat and a Flat; Flat and a ZigZag; Flat and a Triangle; or ZigZag and a Triangle

#### Guidelines:

- Combinations happen more when the Corrective Flat or ZigZag is relatively too minor or small in comparison to the wave that it follows; resulting in more consolidation and sideways action.

### Triple

#### Rules:

- Triples are made of Three corrective patterns joined by two corrective structure in the opposite direction labeled"X"s.
- Triples labeling: "W" for the first Pattern; followed by the "X"; then "Y" for the ending pattern; followed by another "X", and the followed by"Z".
- Three ZigZags result into a Triple ZigZag combination.
- Triple ZigZags take the place of a ZigZag in a corrective move.
- "Triple Three" flat combination is rare and it is formed by combination of three lats.

#### Guidelines:

- Combinations happen more when the Corrective Flat or ZigZag is relatively too minor or small in comparison to the wave that it follows; resulting in more consolidation and sideways action.