Elliott Wave Extensions in a 5-Wave Move: How to Identify & Trade Them

In this article, you will learn how to identify and trade Elliott Wave Extensions within impulsive structures. One of the core rules of Elliott Wave Theory states that in a 5-wave structure, Wave 3 cannot be the shortest. However, this doesn’t always mean Wave 3 must be extended. While extensions most commonly appear in Wave 3, they can also occur in Wave 5 or Wave 1.

Elliott Wave Extensions in Waves 1, 3, and 5 - Visual Guide — **Illustration:** *Elliott Wave extensions in Waves 1, 3, and 5 (common scenarios).*

Statistics show that 90% of extensions occur in Wave 3, making it the strongest wave. When Wave 3 extends, it typically reaches at least a 1.618 Fibonacci extension of Wave 1 and can extend up to 2.618 or beyond. Extensions in Wave 5 are more likely than in Wave 1.

Elliott Wave Extensions: Key Rules to Follow

– If wave 5 is extended – wave 3 needs to be longer than wave 1, otherwise Elliott Wave count is wrong.
– When wave 1 extends – wave 5 must be shorter than wave 3, otherwise Elliott Wave count is wrong.
– For an extended wave 3 – wave 5 target could be got in 2 ways. It could be eather equal in length to the wave 1 or it’s 61.8% fibonacci extension of the length wave 1+wave 3 related to the wave 4.
– Impulsive waves with at least 1 wave extended should at least contain 9 swings and would increase to 13 or 17 swings if there are more extensions within.

Third Wave Extension (13 Swings Structure) - Elliott Wave Pattern — **Most Common Scenario:** *Third Wave Extension (13 swings structure) in impulsive markets.*

Elliott Wave Extensions: Final Summary

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