Motive waves & the three rules

The five-wave motive sequence is the backbone of a trend — and unlike most market “theories,” Elliott Wave gives you rules that can be broken. That’s what makes a count falsifiable: if a rule breaks, the count is simply wrong, and you start over. No opinion, no hoping.

The five-wave impulse

A motive move has a job for each wave: 1 kicks off the new trend, 2 pulls back as doubters sell, 3 is usually the longest and most powerful as the crowd piles in, 4 is a calmer pause, and 5 is the final push, often on fading momentum. One, three and five push with the trend; two and four rest against it.

The three unbreakable rules

Memorise these. If any one is violated, it is not a valid impulse — full stop.

Rule 1 in action: Wave 2 can retrace a little or a lot, but the moment it dips below where Wave 1 began, the count is dead. Drag it and watch the verdict flip:

Guidelines (usually true, not laws)

Beyond the hard rules are tendencies that sharpen a count. Wave 3 is often the extended, longest wave — never trade against a strong third. And alternation: if Wave 2 is a sharp, deep pullback, Wave 4 tends to be a shallow, sideways one (and vice versa). Fibonacci shows up too — Wave 2 often retraces 50–61.8%, while Wave 3 frequently extends to 1.618× Wave 1.