Fifth Elliott Wave Extensions are special Elliott wave phenomenon.
Indeed, the extendable Elliott waves are the first, third and fifth Elliott
waves without forgetting the motive wave itself. The objective of this
writing is to explain how and when the fifth Elliott wave extensions occur;
but also to teach day or swing traders and investors how to trade or
forecast the fifth Elliott wave extensions.
Image = a graph showing a regular fifth Elliott wave extension.
Notice the fifth sub-wave extension of the fifth wave itself
in a smaller rectangle.
Determinants Of Elliott Wave Extensions
1/ strong fundamentals that adjust with the predominating bullish market
opinion bullish trends),
2/ deteriorating financials in a bearish market context (bearish trends),
3/ unexpected bullish or bearish earnings release or economic news,
4/ super bullish or bearish cycle that is pushing a distinct sector or the
5/ money flow or transfer of wealth from one segment of the world to
6/ innovation or revision of management unit,
7/ natural disasters, and
8/ distortions or market manipulations.
Why The Fifth Elliott Wave Extensions
Aside from the prime factors, which can drive a motive wave beyond
its usual boundaries, the fifth wave stretches beyond its natural frontiers
if both the first and third waves did not stretch.
Such is the prime technical factor that causes an extended fifth Elliott wave.
Indeed, intelligent Elliott wave practitioners agree that one of the three
motive waves will extend. Consequently, if neither the first nor the third
extends, the fifth Elliott wave is likely to extend.
See that is not a rigorous science, but simply a guide in the untidy financial
markets. Evidently, it is a huge likelihood expectation, although one will not
An extra agent that produces the fifth wave extension is a lengthy fourth
wave. Anytime, a shallow fourth Elliott wave becomes too long, or
one remarked variety of triangle (abcde wave chart pattern), one may
await an extended fifth Elliott wave.
Deeper Understanding Of The Fifth Wave Extensions
It is fundamental to grasp why that is usually the case. In the occurrence
of abcde wave chart pattern or triangle, Elliott traders and additional market
members acknowledge that the bullish trend is not over yet. Consequently,
as the fourth wave shifts into a consolidation in a configuration of a triangle,
it generates a frenzied accumulation hot spot trading zone. Both bulls and
buying orders (trading volume) rush to
a maximum level.
A precise bullish trade setup is at once unmistakable to nearly all bullish
Ending Diagonal (type of fifth wave extension)
One more word for that fifth Elliott wave extension is the ending diagonal.
The structure of the ending diagonal occurs in the fifth Elliott wave.
The internal waves' structure is (3, 3, 3, 3, 3). The ending diagonal is an
elaborate fifth Elliott with five unusual internal waves. Though, it is a motive
Moreover, the whole fifth wave stays in a directional triangle.
In addition, a few relate to it as a wedge.
View the charts
Image = graph showing both a rising
and declining ending diagonal in the fifth
At any time, the last portion of a particular price pattern is a triangle;
such a thing ordinarily designates a possible reversal trading setup.
Indeed, the fifth Elliott wave is the last play of a particular price structure
i.e.: the motive wave. Consequently, a sharp correction often gets under
way on the completion of the ending diagonal.
If one is trading after a bullish ending diagonal, the minimum bearish target
is the root (starting point) of the fifth wave.
Mastering The Ending Diagonal
Whenever the price action from the first wave to fourth is too fast (price
travels at a high speed too far), the fifth Elliott wave is prone to be an ending
In fact, if there is a suitable representation for dumb money, that will be it.
Dumb money is the money that one applies to buy an asset at the time just
when market movers are busy distributing. The contrast is also valid whenever
one is selling (to hold) at the point where large financial institutions are
Similarly, if one invests in a firm at the time when the stock displays a rising ending
diagonal, one has definitely dumped money. In Reality, dumb money is dumped
money. Sometimes, investors also sell just as a bearish stock shows a negative
slope ending diagonal. The typical victims, in this case, are long-term investors
who lost patience as the bearish term is about to close.
Ending diagonals are terminal patterns that flag an imminent reversal.
The Truths About The Ending Diagonal
a/ ending diagonal frequently appears after the fourth Elliott wave if the price
advances or declines extremely fast and too far during wave one to four,
b/ once a rising ending diagonal is moving, smart investors that acknowledge
that the asset is now overbought, begin to divest or sell steadily,
c/ once a declining ending diagonal is moving, smart investors that acknowledge
that the asset is now oversold, begin to accumulate or buy steadily,
d/ rising ending diagonal points to a distribution,
e/ declining ending diagonal points to an accumulation,
f/ an ending diagonal is a contraction
that accompanies a wild expansion (price runs too far too fast),
g/ internal waves (3, 3, 3, 3, 3) reflect the unknown correction that is even now
underway (distribution that is occurring throughout the fifth bullish wave).
h/ rising ending diagonal is likewise a rising wedge,
i/ a rising wedge is not regularly an ending diagonal,
j/ a falling ending diagonal is also a falling wedge, but a falling wedge is not
invariably an ending diagonal,
k/ ending diagonal is a complex extended fifth Elliott wave,
l/ fifth Elliott wave extension is a complex wave,
m/ fifth Elliott wave extensions are not always ending diagonal,
n/ internal waves (3, 3, 3, 3, 3) reflect the unknown correction that is even
now underway (accumulation that is occurring throughout the fifth bearish wave).
Fifth Wave Extensions Forecast
At this point, one can surely forecast the fifth Elliott wave extensions by checking if
both the first and third Elliott waves did not extend. In all instances, one will
analyse the fundamentals and implement the trading triangle.
Furthermore, one is likewise equipped to predict if the fifth wave extension is destined
to be an ending diagonal or not by considering the price action from wave one to
four. Apart from the present techniques, one will further gain mastery in forecasting
the fifth wave by viewing the ensuing video tutorial.
View the video
Title: How To Forecast The Fifth Elliott Wave
Description: Learn exactly how to predict the fifth Elliott wave.
Understand the correct procedure to determine
the end of the last impulse wave. Get started.
The fifth wave extension is highly rewarding Elliott wave phenomenon. It is the latest
lap of the motive wave (that leaves the best part in the end). Actually, one cannot bear
to miss it. As numerous uninformed financial market traders anticipate an untimely
reversal, a swift frenzied fifth Elliott wave extension begins. Various market partakers
may suffer substantial losses particularly during a regular extended fifth wave extension,
(that is not an ending diagonal).
Indeed, by mastering the fifth Elliott wave extensions, one can evade trading and investment
mistakes and gain from the financial markets.
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