Trends/Relative strength, cycles and structure

Elliott wave impulse

A five-part move in one direction, with three pushes and two pullbacks between them.

Relative strength, cycles and structureBest on 1Y, 3Y, MAXAlso called five-wave sequence

Illustration of the Elliott wave impulse shape. It is a sketch, not real price data.

What it shows

In Elliott wave theory, a trend moves in five waves: waves 1, 3 and 5 go with the trend and waves 2 and 4 go against it. Rules from Frost and Prechter: wave 2 never retraces more than all of wave 1, wave 3 is never the shortest, and wave 4 does not overlap wave 1.

Counting waves needs judgement, and different analysts count the same chart differently. We show the rules as a checklist on the swings found.

How we find it

The same code that draws it on your chart follows these steps, with the same result every time.

Find 6 consecutive swing points with the zigzag.
Check wave 2 does not go below the start of wave 1.
Check wave 3 is not the shortest of waves 1, 3 and 5.
Check wave 4 does not enter the range of wave 1.

Starting values: Swings 6 points; Rules 3. These are proposed and will be tuned on real price data before launch.

How to read it

Numbers mark the waves.
Waves 1, 3 and 5 go up.
Waves 2 and 4 pull back.

Status labels you may see

Label	What it means
All rules pass	The three rules hold.
A rule fails	At least one rule fails.
No count	Not enough swings.

What cancels it

Cancelled when a rule fails.

What traders check next

Wave lengths.
Fibonacci ratios between waves.
Alternative counts.

Limits

Highly subjective.
Wave counts change after the fact.
Rules passing does not mean a wave count is right.

Try it in forecastviz

Open any ticker and choose Relative strength, cycles and structure → Elliott wave impulse in the left menu.
Switch between 1Y, 3Y, MAX to see how the picture changes.
Compare with ZigZag swings and Fibonacci retracement on the same chart.

Open on a ticker

Questions

Is it a prediction?

No claim. Counts are interpretations of the past.

Why 5 waves?

That is how the theory describes a trend.