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Rule

Wave 2 Rule

An absolute rule stating that Wave 2 can never retrace more than 100% of Wave 1. If price moves beyond the starting point of Wave 1, the wave count is invalidated. This is one of the three inviolable rules of Elliott Wave analysis.

RELATED TERMS

Wave 1
The first impulse wave in a five-wave sequence. Wave 1 is often the hardest to i...
Wave 2
The first corrective wave in an impulse sequence. Wave 2 retraces a portion of W...
Invalidation Level
The price level at which a wave count is proven wrong. For example, if a Wave 4 ...
Wave 2All TermsWave 3
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