Overview
When wave 5 ends beyond the channel line, it is called a throw-over.
Normally, an impulse fits inside the channel formed by two parallel lines, but when wave 5’s upward energy is strong, it can pierce through the upper channel line and end above it. This breakout is the throw-over.
Throw-overs often occur after price approaches the channel line with increasing volume. After the channel line is breached, a sharp reversal frequently occurs, making this an important trend reversal signal. However, throw-overs do not occur in expanding diagonals or expanding triangles.
Illustrated Chart
Wave 5 throws over the channel line and reverses sharply — Click to expand
Detailed Points
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Approach to the channel line with rising volume → high probability of throw-over
When price approaches the channel line with increasing volume, the probability of a throw-over rises.
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A sharp reversal often follows a throw-over
After wave 5 breaks above the channel line, a rapid reversal often occurs, functioning as a trend reversal signal.
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Throw-overs do not occur in expanding diagonals or expanding triangles
Throw-overs are observed in standard impulses and contracting diagonals. They do not occur in expanding diagonals or expanding triangles.
Related Terms
Summary
Throw-over is a phenomenon where wave 5 of an impulse ends beyond the channel line — an important Elliott Wave reversal signal often followed by a sharp reversal.
It tends to occur when price approaches the channel line with increasing volume, and the sharp reversal that follows is a strong clue for a trend reversal. Note, however, that it does not occur in expanding diagonals or expanding triangles.
