Elliott Wave in Action
Real analysis examples with verified outcomes. We include both winning and losing trades because transparency builds trust.
Wave 3 Extension to 161.8%. Textbook Impulse
Movement
+27 pts
R:R
2.7:1
Duration
18 trading days
After a clear Wave 2 retracement to the 61.8% Fibonacci level ($168), our daily analysis identified the start of Wave 3. The invalidation was set below Wave 1 origin at $158.
Wave 3 extended exactly to the 161.8% Fibonacci extension at $195. a $27 move. The initial risk was $10 with a stop below Wave 1, giving a 2.7:1 reward-to-risk ratio.
Wave 3 extensions to 161.8% are the most reliable pattern in Elliott Wave. When Wave 2 retraces to 61.8% and holds, the probability of a Wave 3 extension is significantly higher.
Triangle in Wave 4. Breakout to Wave 5
Movement
+14 pts
R:R
3.8:1
Duration
7 trading days
GLD formed a contracting triangle (A-B-C-D-E) in the Wave 4 position on the daily chart. The H4 chart confirmed the E wave completion with a bullish reversal candle. Target: 100% equality of Wave 1 measured from Wave 4 end.
The breakout from the triangle led to a clean Wave 5 rally. Price reached our target zone within one week. The tight triangle structure provided a very small stop loss, resulting in an excellent risk-reward.
Triangles in Wave 4 are one of the most tradeable patterns because the E wave provides a precise entry point with a small stop loss. Wave 5 after a triangle is typically swift but shorter than Wave 3.
Failed Wave 5. Early Invalidation Signal
Movement
-12 pts
R:R
-1:1
Duration
3 trading days
Our analysis projected a Wave 5 extension in TSLA. However, the wave structure showed overlapping price action and declining momentum. classic signs of a potential truncation or count error.
Wave 5 failed to exceed Wave 3 high (truncation) and reversed sharply. Our invalidation level was hit 3 days after publication. The analysis was marked as INVALIDATED on our scorecard.
Not every analysis works. This case demonstrates why invalidation levels are critical. When Wave 5 shows overlapping subwaves and declining RSI divergence, reduce position size or wait for confirmation.
Macro Wave Count. Identifying the Larger Cycle
Movement
+1600 pts
R:R
2.1:1
Duration
34 trading days
Our weekly analysis showed US100 completing a larger degree Wave 3 at 18,500. We projected a Wave 4 correction to the 38.2% retracement level near 16,800. The daily chart confirmed the start of a three-wave corrective structure (A-B-C).
The correction played out almost exactly as projected. Wave A dropped sharply, Wave B retraced 61.8% of A (a flat correction), and Wave C reached our target zone between 16,700-16,900. We then published a bullish reversal setup for Wave 5.
Multi-timeframe analysis is essential. The weekly chart provides the macro context, and the daily chart reveals the corrective structure. Without the weekly perspective, the correction could have been mistaken for a new downtrend.
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