Truncation
Elliott Wave Theory glossary · Core Axioms & Motive Wave Rules
Definition
A fifth wave that fails to exceed the price extreme of Wave 3, signalling exhaustion in the trending move. Truncations are rare because speculative fervour typically drives Wave 5 well beyond Wave 3, but they occur when an exceptionally powerful third wave has already exhausted the dominant side's pressure.
Truncation in plain English
In a healthy five-wave trend, the final push (wave 5) usually charges past the peak set by wave 3 — the crowd's excitement carries it to a fresh extreme. A truncation is the rare disappointment where wave 5 tries but fails to beat wave 3's high (or low), like a runner sprinting the last lap but not quite crossing the previous best mark. It's a warning sign that the trend has run out of gas: the powerful third wave already burned up most of the buying (or selling) pressure, leaving too little fuel for a strong finish.
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