close icon

Elliott Wave Patterns

Technical analysis in general is a method of market forecasting, based on pattern recognition. The Elliott Wave Principle is a more specific method, which uses its own patterns, called “waves”. They are as follows:


What is an impulse? Every impulse consists of 5 waves. Impulses show the direction of the larger trend. There are only three simple rules for an impulse:

  1. Wave 2 must not go beyond the start of wave 1.
  2. Wave 3 can not be the shortest among waves 1, 3 and 5.
  3. Waves 1 and 4 must not overlap.


elliott wave impulse

In order to be categorized as an impulse, every five-wave looking pattern should have the following sub-wave structure: 5 sub-waves (labeled 1-2-3-4-5) for waves 1, 3 and 5, and 3 sub-waves (labeled a-b-c) for waves 2 and 4. Example:

elliott wave impulse structure

Truncated fifth wave

Truncated fifth wave is maybe the rarest of all Elliott Wave patterns. It occurs, when wave 5 of a five-wave impulsive pattern does not go beyond the end of wave 3 of the same impulse. In order to recognize such a truncation, one should be able to count five sub-waves in the supposed truncated fifth. Example:

elliott wave truncated fifth wave


After every impulse, a correction follows. What is a correction? Corrections are 3-wave movements in the opposite direction of the larger trend. After every correction the larger trend resumes. Example:

5-3 elliott wave cycle

Three types of corrections exist

  1. Zig-zag correction

This type of correction consists of 3 waves, labeled A-B-C, with a 5-3-5 structure (5 waves for A, 3 waves for B and 5 waves for C) Example:

elliott wave zig-zag correction

Sometimes two or three zig-zag corrections occur, connected by an intervening X-wave. In the first case they are labeled W-X-Y, while in the second one there is one more X-wave, connecting Y with Z, thus completing the triple zig-zag W-X-Y-X-Z. Examples:

elliott wave patterns double zig-zag

elliott wave triple zig-zag

2.Flat correction

This type of correction consists of 3 waves, labeled A-B-C, with a 3-3-5 structure (3 waves for A, 3 waves for B and 5 waves for C). And while the wave structure remains always 3-3-5, the shape of flat corrections could be regular, expanding or running. Regular flat example:

elliott wave regular flat

Expanding flat example:

elliott wave expanding flat

Running flat example:

elliott wave running flat

3.Triangle correction

Every triangle correction consists of 5 waves moving sideways, labeled A-B-C-D-E. Each one of these 5 waves has a 3-wave structure (3-3-3-3-3).  Triangles indicate that there is only one final move left in the direction of the larger trend, after which, a reversal should be expected. This means that triangles occur as wave 4 of an impulse, wave B of a zig-zag correction, or the final wave X in double and triple zig-zag corrections. Sometimes triangles could be positioned as wave Y or wave Z of a corrective combination. Example:

elliott wave triangleThe above-shown triangle is the most common type, where the two lines are contracting, thus making the whole pattern narrowing towards the end. However, there are some cases, when the lines are expanding. On the next chart you can see a good example of an expanding triangle.

elliott wave expanding triangle


Something called “diagonal” sometimes appears instead of an impulse wave. This could happen in wave 1 of an impulse and wave A of a correction for a leading diagonal, or in wave 5 of an impulse and wave C of a correction for an ending diagonal. Every diagonal consists of 5 waves just like a regular impulse wave, but here you should expect waves 1 and 4 to overlap and each wave to subdivide into 3s (rarely 5-3-5-3-5). Example:

elliott wave ending diagonalOn the chart above you can see how a typical ending diagonal looks like in the position of wave five (5). The next chart below shows a leading diagonal in wave (1) position.

elliott wave leading diagonal

Stay informed with our newsletter

Latest Elliott Wave analysis on different topics delivered to you weekly.

You may also like:

How to Recognize a Leading Diagonal Pattern

One of the first Elliott Wave patterns we devoted an entire lesson to was the ending diagonal. It is relatively easy to recognize and very important, because it is usually followed by a sudden trend reversal. But if there is an ending diagonal, there must be a leading diagonal, as well, right? Yes, there is…

Read More »

Elliott Wave: The Devil Is In the Details

Probably the strongest argument critics use against the Elliott Wave Principle is that traders could often come up with two or more sometimes equally probable scenarios for the market’s future direction. That is true. In an environment filled with uncertainty, it is not always easy to pick just one single count. In fact, we suggest you…

Read More »

The Mischievous Running Flat Correction

In “Expanding Flat and How to Avoid Its Traps” we examined probably the most common type of flat correction the markets could offer. It is easy to spot and relatively easy to trade. However, if you are constantly expecting the expanding variety, you are not going to be prepared for its exotic, but deceptive cousin…

Read More »

Why Waiting For Confirmation? A Tale Of Greed

Every trader with enough experience in the market usually comes to the conclusion, that he needs a system of rules to go by. Rules, which should not let him abandon his discipline and get emotional while trading. Every trading methodology has one such system, which tells you when to go in and out of the market.…

Read More »

What Is Fundamentally Wrong With Fundamentals?

Can you guess which country has the best-performing global stock market so far in 2015? Germany? Japan? USA? Nope. The Business Insider came up with the “surprising” answer yesterday. It is Russia. Yes, Russia – a country in a state of war, whose currency has been suffering terribly against the US dollar and the euro. If…

Read More »

When Does an Elliott Wave Setup Fail?

As a rule, you should never give up on a trade, if it still has the potential to develop in your favor. But how to determine, if a trade is no longer valid? Fundamental market analysis does not provide such information at all. Conventional technical analysis rarely gives you a concrete level for the protective stop. Only…

Read More »

How to recognize an unreliable support?

“The support level is an area below the current price, which has prevented it from falling further in the past. That is why we would usually expect prices to bounce up from it again, when this support level is reached in the future.” This is the short definition of a support level and how traders…

Read More »

More analyses