Wave 4 Rule
Wave 4 Rule in Elliott Wave Theory: An absolute rule stating that in an impulse wave, Wave 4 cannot enter the price territory of Wave 1. The low of Wave 4 must remain above the high of Wave 1 in a bull market (and vice versa in a bear market). The only exception is in diagonal patterns.
What Wave 4 Rule Means
An absolute rule stating that in an impulse wave, Wave 4 cannot enter the price territory of Wave 1. The low of Wave 4 must remain above the high of Wave 1 in a bull market (and vice versa in a bear market). The only exception is in diagonal patterns.
Where You'll See It
Wave 4 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