A checklist for verifying whether a proposed Elliott Wave count is valid. Covers the three rules, key guidelines, and common errors.
Description
After completing a wave count, systematically verify it against the three absolute rules and the most important guidelines. A count that violates any rule must be discarded. A count that violates many guidelines should be treated with skepticism.
Checklist
- ✅ Rules 1–3: Wave 2 does not retrace beyond the start of wave 1; waves 1 and 4 do not overlap; wave 3 is not the shortest actionary wave
- ✅ Sub-wave structure: impulse sub-waves are 5-wave; corrective sub-waves are 3-wave
- ✅ Alternation: waves 2 and 4 are in different forms (one sharp, one sideways)
- ✅ Channeling: wave 5 ends near the upper channel line drawn through ends of waves 1 and 3
- ✅ Fibonacci ratios: wave lengths show expected Fibonacci relationships
- ✅ Previous 4th wave (Previous): wave 4 corrects into the range of the previous 4th wave
- ❌ Previous 4th wave guideline: if correction is far outside the previous 4th wave zone, reconsider the count
- ❌ Volume: if wave 5 volume significantly exceeds wave 3 volume, the count may be incorrect (unless wave 5 extends)
Key Points
- The three rules are absolute — any violation invalidates the count
- Guidelines are tendencies — violations do not invalidate but should reduce confidence
- Maintain the simplest count that satisfies all rules and the most guidelines
- If multiple counts remain viable, rank them and monitor which one the market confirms
