The fundamental pattern of Elliott Wave Theory: 5 waves in the direction of the main trend (impulse) followed by 3 waves in correction. Each sub-wave also follows this pattern.
Description
The 5-3 wave structure is the foundation of Elliott Wave Theory. In a bull market: 5 waves advance (impulse), then 3 waves decline (correction). The 5-wave advance consists of three actionary waves (1, 3, 5) separated by two corrective waves (2, 4). The 3-wave correction consists of waves A, B, and C. At the next smaller degree, each wave subdivides into the same pattern.
Key Points
- Complete cycle: 5 waves up (impulse) + 3 waves down (correction) = 8 waves total
- Impulse waves (1, 3, 5) subdivide into 5 smaller waves each
- Corrective waves (2, 4, A, B, C) subdivide into 3 smaller waves each
- The 5-3-8 numbers are consecutive Fibonacci numbers
- One complete 5-3 cycle becomes wave 1 of the next larger degree
