medium · Elliott Wave Theory
During a trending move, you identify a five-wave structure. Wave 3 is 1.618 times the length of Wave 1. Wave 5 is approximately equal to Wave 1.
Which guideline was applied to estimate Wave 5, and why?
- The Proportionality Principle; all waves in a cycle must maintain the same price amplitude.
- The Guideline of Equality; when Wave 3 extends, the other two impulse waves tend toward equality.
- The Alternation Guideline; motive waves must alternate in length as corrections alternate in depth.
- The Fibonacci Extension rule; Wave 5 must always be a 1.000 ratio of Wave 1.
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