Wave 2 Rule
Wave 2 Rule in Elliott Wave Theory: An absolute rule stating that Wave 2 can never retrace more than 100% of Wave 1. If price moves beyond the starting point of Wave 1, the wave count is invalidated. This is one of the three inviolable rules of Elliott Wave analysis.
What Wave 2 Rule Means
An absolute rule stating that Wave 2 can never retrace more than 100% of Wave 1. If price moves beyond the starting point of Wave 1, the wave count is invalidated. This is one of the three inviolable rules of Elliott Wave analysis.
Where You'll See It
Wave 2 Rule appears regularly in Artavest's weekly wave-count analysis across 108 US stocks and ETFs. It's part of the rule family of Elliott Wave concepts and shows up most often when analysts are checking whether a candidate wave count satisfies the absolute rules — a violation kills the count immediately.
- → Elliott Wave Theory Guide — the 5-3 pattern, rules, Fibonacci, wave degrees
- → Elliott Wave Cheat Sheet — the 3 absolute rules and 6 Fibonacci relationships
- → Our Methodology — how Artavest analysts count waves on 108 US instruments