When wave 5 extends, it typically reaches 1.618× the distance from the start of wave 1 to the end of wave 3.
Description
When wave 5 is the extended wave, the common price target is 1.618× the net distance traveled from the start of wave 1 to the end of wave 3, measured from the end of wave 4.
Key Points
- Wave 5 extension target: 1.618× (wave 1 start to wave 3 end), added from wave 4 end
- Alternatively: wave 5 = wave 1 × 1.618 (when wave 3 is not extended)
- Wave 5 extensions are most common in commodity markets
- The extended wave 5 will subdivide into clearly visible sub-waves
