Waves, degree
by degree.
Learn the Elliott Wave Principle from the ground up. You'll start with the five-and-three rhythm, move on to the three rules that never bend, and finish by reading live WMT, ASTS and COIN weekly charts with honest alternate counts.
Begin the courseFive steps forward, three back
In the 1930s an accountant named Ralph Nelson Elliott studied decades of stock-index data. He concluded that crowd behavior moves prices in recognizable patterns. His 1938 monograph, The Wave Principle, described the core rhythm: a trend advances in five waves and is corrected in three.
The five waves that move with the larger trend are motive waves, labeled 1–2–3–4–5. Inside that move, waves 2 and 4 are small counter-trend pauses. The three-wave move against the trend is corrective, labeled A–B–C. Together they form one complete cycle of eight waves.
The principle is fractal. Each wave is itself built from smaller waves following the same rules, and each completed cycle becomes just waves 1 and 2 of something larger. Elliott called these levels degrees. Press the buttons below to zoom in one degree at a time.
The counts 2, 8, 34 and 144 are all Fibonacci numbers. That isn't a coincidence of the drawing. Every motive wave splits into 5 and every simple corrective wave into 3, so the totals step through the Fibonacci sequence. Elliott himself highlighted the link in Nature's Law (1946), and it is the basis for the Fibonacci ratios you'll meet in Chapter 7.
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- Three hard rules
- Impulses on real charts
- Guidelines
- Corrections
- Diagonals
- Fibonacci
- Degree & notation
- Wave personality
- Scenarios & invalidation
- Final exam
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The impulse and its three unbreakable rules
The most common motive pattern is the impulse: five waves in which waves 1, 3 and 5 push with the trend, while waves 2 and 4 correct. Internally it subdivides 5-3-5-3-5. Almost everything in Elliott analysis depends on recognizing it. Three rules define it, and if any one is broken, the pattern is not an impulse.
Unlocks free when you join the waitlistCounting a real chart: ASTS 2024–26
Textbook diagrams are clean, and real charts aren't. Here is AST SpaceMobile on weekly candles. It's one analyst-selected candidate count, run through the same three rules. Step through it one wave at a time.
Unlocks free when you join the waitlistGuidelines: what usually happens
Rules tell you what's impossible. Guidelines help you rank the possible counts. They are statistical tendencies Elliott and later practitioners observed, so use them to prefer one count over another, never to disqualify one.
Unlocks free when you join the waitlistCorrections: the hard part
Motive waves are relatively easy to spot. Corrections are where analysts disagree. They come in more shapes and often stay ambiguous until they're finished. There are four families. Learn their internal structure, because a correction is defined by how its legs subdivide.
Unlocks free when you join the waitlistDiagonals: the wedge-shaped exception
A diagonal is a motive pattern, so it moves with the trend and has five waves. But it's wedge-shaped, and wave 4 almost always overlaps wave 1. It's the one legal place for that overlap. Diagonals appear only in specific positions.
Unlocks free when you join the waitlistFibonacci: proportion, not prophecy
In the Fibonacci sequence, each number is the sum of the two before it. Divide neighbors, or numbers two steps apart, and the ratios settle onto a few constants. Elliott practitioners use those constants to estimate where waves might end.
Unlocks free when you join the waitlistDegree & notation: who's inside whom
Because waves nest, a label must tell you not just which wave but what size. Elliott named nine degrees, from Grand Supercycle (multi-century) down to Subminuette (hours). Each degree has its own label style. Below are the eight most used, in the classic Frost & Prechter convention.
Unlocks free when you join the waitlistEvery wave has a personality
Prechter emphasized that each wave tends to carry a characteristic crowd mood. Recognizing the mood can help when the price pattern alone is ambiguous. These are descriptions of tendencies, not signals.
Unlocks free when you join the waitlistThink in scenarios, define what's wrong
The professional habit that separates Elliott analysis from storytelling is this: always carry a preferred count and at least one alternate, and attach to each a price that proves it wrong. That price is the invalidation level.
Unlocks free when you join the waitlistTwelve questions. No hints.
Explanations appear only after you submit. Score 10 or more to earn the "Wave Reader" mark.
Unlocks free when you join the waitlistSources & data provenance
- R. N. Elliott, The Wave Principle (1938) and Nature's Law (1946).
- A. J. Frost & R. R. Prechter, Elliott Wave Principle: Key to Market Behavior: rules, guidelines, degree notation, wave personality.
- Elliott Wave International, Waveopedia: Motive waves, Impulse, Diagonals, Corrective waves, Alternation, Fibonacci relationships. EWI is authoritative on the method's definitions, but it sells EWT products and isn't an independent test of forecasting skill.
- Investopedia: Elliott Wave Theory, an independent introduction including criticism of subjectivity and hindsight.
Chart data
Weekly candles are built from Yahoo Finance's unofficial daily chart endpoint: Monday–Friday weeks, first open, max high, min low, last close, summed volume. Only completed weeks are used. Prices are split-adjusted provider OHLC, not dividend-adjusted. The 50-/200-week lines are simple moving averages of weekly closes. Delay and coverage aren't guaranteed. Every pivot price quoted in the lessons is re-read from these bars by the build script. Wave labels are analyst hypotheses; nested subdivisions are unverified.
Educational material only. Nothing here is investment advice or a recommendation to trade any security.