What are the three absolute rules of Elliott Wave?

1) Wave 2 cannot retrace more than 100% of Wave 1. 2) Wave 3 is never the shortest impulse wave. 3) Wave 4 cannot overlap Wave 1 price territory in an impulse.

What is the most important Fibonacci level in Elliott Wave?

The 161.8% extension is the most important. Wave 3 frequently extends to 161.8% of Wave 1, confirming a strong impulse move.

How many wave patterns are there in Elliott Wave?

The main patterns are: Impulse (5-wave), Zigzag, Flat, Triangle, Diagonal, and complex corrections (Double/Triple Zigzag). Each has specific internal structure rules.

quick reference

Elliott Wave Cheat Sheet

All rules, patterns, and Fibonacci relationships in one page. Bookmark this for quick reference during your analysis.

wave rules & guidelines

Absolute

Wave 2 cannot retrace more than 100% of Wave 1

Absolute

Wave 3 is never the shortest impulse wave

Absolute

Wave 4 cannot overlap Wave 1 price territory in an impulse

Guideline

Alternation: if Wave 2 is sharp, Wave 4 tends to be flat (and vice versa)

Guideline

Wave 3 usually has the strongest momentum and volume

Guideline

Wave 5 sometimes fails to exceed Wave 3 high (truncation)

Structure

Corrective waves (A-B-C) retrace a portion of the preceding impulse

Structure

Extended waves: one impulse wave (usually 3) is significantly longer than the other two

fibonacci relationships

Relationship

Key Levels

Most Common

Note

Wave 2 retracement of Wave 1

50% — 61.8% — 78.6%

61.8%

Golden ratio is most common

Wave 3 extension of Wave 1

161.8% — 200% — 261.8%

161.8%

Most important relationship

Wave 4 retracement of Wave 3

23.6% — 38.2% — 50%

38.2%

Tends to be shallow

Wave 5 vs Wave 1

61.8% — 100% — 161.8%

100%

Often equals Wave 1

Wave A of correction

38.2% — 50% — 61.8% of impulse

Varies

First leg of correction

Wave C vs Wave A

100% — 161.8%

100%

C often equals A

wave patterns

Impulse (5-wave)

1-2-3-4-5

With trend

5 waves in the direction of the larger trend. Waves 1, 3, 5 are motive; 2, 4 are corrective.

Zigzag (A-B-C)

5-3-5

Counter-trend

Sharp correction. Wave A is 5 waves, B is 3 waves, C is 5 waves. Most common correction type.

Flat (A-B-C)

3-3-5

Counter-trend

Sideways correction. Wave B reaches near Wave A start. Wave C overshoots slightly.

Triangle (A-B-C-D-E)

3-3-3-3-3

Consolidation

Contracting pattern before final move. Only appears in Wave 4 or Wave B position.

Diagonal

3-3-3-3-3 or 5-3-5-3-5

With trend

Wedge-shaped pattern. Leading diagonal in Wave 1/A, ending diagonal in Wave 5/C.

Double/Triple Zigzag

W-X-Y or W-X-Y-X-Z

Counter-trend

Complex correction combining multiple zigzags. Deepens the correction.

quick tips

Always start counting from the weekly timeframe and work down to daily, then 4-hour.

If your count violates an absolute rule, discard it immediately. Do not force a count.

Wave 3 is your friend. It has the strongest momentum, widest range, and highest volume.

Use Fibonacci confluence zones where multiple levels from different waves overlap.

Track every analysis on a scorecard. If your hit rate drops below 50%, review your methodology.

When in doubt, stand aside. The market will always present another opportunity.

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