What is Wave 3 in Elliott Wave?
Wave 3 is the third wave in an Elliott impulse and typically the strongest, longest wave. It commonly extends to 1.618× the length of Wave 1. The absolute rule: Wave 3 cannot be the shortest of Waves 1, 3, and 5.
Full Explanation
Wave 3 is the most explosive wave in most Elliott Wave impulses. It carries the strongest momentum, the heaviest volume, often produces breakout gaps, and typically extends to 1.618× or 2.618× the length of Wave 1. By the time Wave 3 is underway, sentiment has flipped from negative to positive, institutional participation is heavy, and trend-following systems are firing buy signals. Wave 3 cannot be the shortest of Waves 1, 3, and 5 — this is one of Elliott Wave's three absolute rules. If your candidate count shows Wave 3 shorter than both Wave 1 and Wave 5, the labels are wrong and the count must be redone. Wave 3 is the most commercially valuable wave to identify in advance because it produces the largest, fastest moves. Most professional Elliott Wave traders structure their entries to catch the Wave 3 acceleration.
- → Elliott Wave Theory Guide — the 5-3 pattern, rules, Fibonacci, wave degrees
- → How to Count Elliott Waves — 6-step process used on 108 instruments
- → Elliott Wave Fibonacci Guide — the 7 core ratios and how they're applied
- → Rules and Guidelines — the 3 absolute rules + 7 guidelines
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