Niko

Elliott waves exhibit fractal (self-similar) structure: the same 5-3 pattern appears at every degree of trend. Each wave contains smaller waves of the same form.

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.

An impulse wave is a 5-wave pattern that moves in the direction of the larger trend. It must satisfy three absolute rules and tends to follow several guidelines.

The three absolute rules that every impulse wave must satisfy. Any count that violates these rules is invalid: (1) Wave 2 does not retrace beyond wave 1 start; (2) Wave 3 is never the shortest; (3) Wa

The internal structure of each wave in an impulse: waves 1, 3, 5 subdivide into 5 smaller waves (impulse or diagonal); waves 2 and 4 subdivide into 3 smaller waves (any corrective form).

A diagonal is a motive wave with a wedge shape (converging or diverging). Unlike a standard impulse, diagonals allow overlap between waves 1 and 4. They appear as wave 1 (leading) or wave 5/C (ending)

A diagonal that appears as wave 1 of an impulse or wave A of a corrective pattern. Signals the start of a new trend. The 3-3-3-3-3 sub-wave structure is most common.

A diagonal with diverging trendlines — each sub-wave is larger than the previous. Rare. The expanding ending diagonal appears at wave 5; the expanding leading diagonal appears at wave 1.

A sharp corrective pattern consisting of three waves: A-B-C, subdividing 5-3-5. The most common corrective pattern. Wave B retraces only a portion of wave A; wave C extends beyond wave A.