Elliott Wave Impulse Structure - Ground Rules

In this technical video we’re going to learn how to identify the most popular among the Elliott Wave patterns: 5 wave Impulsive structure. We’ll get through all conditions which must be met for this popular structure.

Today we’re going to learn how to identify the most popular Elliott Wave pattern i.e 5 wave Impulsive structure.

Here are some ground rules for Elliott Wave Impulse Structure

• Wave 1, 3 and 5 must also be impulse structures.
  Wave 2 must not retrace more than 100% of wave 1 and it usually ends at 50-76.4 Fibonacci retracement area. It can’t be a triangle structure.
• Wave 3 cannot be the shortest one and it’s usually the strongest. It should ideally extend 1.618 Fibonacci extension of wave 1 and it could go up to 2.618 Fib extension or more.
• Wave 4 must not enter the territory of wave 1 (except in a diagonal structure). It is usually a shallow correction which should ideally end at 23.6 fib retracement area of wave 3. It could go to 38.2 fib retracement as well of wave 3.

There always must be RSI divergence between wave 3 and wave 5 and each impulsive subdivision i.e wave 1, wave 3 and wave 5 should have RSI divergence in their internals.