What is Wave 5 in Elliott Wave?
Wave 5 is the final wave in an Elliott impulse, moving in the direction of the larger trend. It typically equals the length of Wave 1 or extends to 0.618× the length of Waves 1 through 3. Wave 5 often shows weakening momentum signaling exhaustion.
Full Explanation
Wave 5 is the impulse's last push in the trend direction. Two common Fibonacci projections apply: Wave 5 often equals Wave 1 in length and duration (the equality guideline), or extends to 0.618× the length of Waves 1 through 3 measured from the Wave 4 low. Wave 5 frequently shows weakening momentum — negative RSI divergence, lower volume than Wave 3, narrower price ranges. Occasionally Wave 5 truncates, failing to exceed Wave 3's high. This is called a 'truncated fifth' and signals exhaustion: a sharp reversal usually follows. Once Wave 5 completes, the entire 5-wave impulse is finished, and a 3-wave corrective A-B-C structure begins. Wave 5 is the riskiest wave to chase as a trader because the reversal is imminent, but it's the most informative wave for identifying the end of a major trend.
- → 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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