Elliott Wave in Practice
Four setups we look for, including the one that fails. Each is described the way we read it on a live chart: what the structure looks like, and where the count stops being valid.
These are teaching examples, not trade records. They describe how each pattern is structured and where its invalidation sits. Our actual published calls sit separately in the public archive, each with its date and the levels it rested on, and we do not publish a figure summarising them.
The Wave 3 Extension to 161.8%
Wave 2 retraces deeply into the 61.8% Fibonacci zone of Wave 1 and holds. Momentum turns while price is still inside that zone, and the first subdivision off the low breaks the Wave 1 high without overlapping the Wave 2 low.
The risk line sits below the origin of Wave 1. If price trades there, the impulse count is dead regardless of how convincing the structure looked, because Wave 2 may never retrace more than 100% of Wave 1.
The 161.8% extension of Wave 1 is the most common target for Wave 3, not a guarantee. A deep Wave 2 that holds raises the odds; it does not remove the need for an invalidation level.
The Contracting Triangle in Wave 4
Five overlapping legs (A-B-C-D-E), each smaller than the last, inside the fourth wave position. The E leg often undershoots the trendline and reverses quickly, which is what makes the boundary readable.
The risk line sits beyond the end of the E leg. A triangle that breaks its own E extreme is not a triangle, and the whole fourth wave count has to be redrawn.
Triangles are attractive because the E leg allows a tight risk line, which is exactly why they are also easy to force onto a chart that is not one. Wave 5 after a triangle is typically swift and shorter than Wave 3.
The Truncated Wave 5
The projected fifth wave fails to exceed the Wave 3 extreme. Warning signs usually appear first: overlapping subdivisions where clean impulsive structure is expected, and momentum falling away rather than confirming.
This is the pattern where the risk line does its job. When the count is wrong, the level is the only thing that tells you early instead of late.
Not every count works. Overlapping subwaves and a momentum divergence in a projected fifth wave are a reason to size down or wait, not a reason to argue with the chart.
Reading the Count Across Timeframes
The weekly chart sets the degree: which wave of the larger cycle is in progress. The daily chart then shows whether the pullback is unfolding as a three-leg correction, which fits a fourth wave, or as something impulsive, which does not.
The higher timeframe count carries the invalidation. A daily structure that looks complete means little if the weekly degree says the correction has further to run.
Without the higher timeframe, an ordinary correction is easily mistaken for a trend change. Degree is the first thing to establish and the last thing to abandon.
See It on Live Charts
Subscribers get the daily analyses these patterns come from, with the wave count, the target levels and the invalidation level stated before the market moves.