Chart reading, commentary, comprehension, verbalization

Go for the 3rd wave of the Elliott Wave. But where is the 1st wave in the first place?

The 3rd wave of the Elliott Wave is said to be the wave that tends to extend the most.

Therefore, I want to capture the 3rd wave.
But when I open the chart, I can't tell.

“Is what’s rising now the 3rd wave?”
“Or is it still the 1st wave?”

There is only one reason why the 3rd wave isn’t clear.
Because we haven’t decided where the 1st wave is.

In this article, we will only explain how to recognize the 3rd wave.

First, what this article does not cover

This article is about “finding” the 3rd wave.
The entry method and the target area are explained in separate articles.

See if it applies to you, and verify

□ After studying Elliott Wave, you still don’t know where the 3rd wave is
□ Every time you count “which wave is it now,” the answer changes
□ You think you’ve got the 3rd wave, but the move was still in the 1st wave
□ You try to count to the 5th wave but get lost along the way

If two or more apply to you, this article is for you.

Count only “1, 2, 3”

I don’t count up to the 5th wave.
Count only 1st, 2nd, and 3rd waves.

Reducing the numbers reduces the places you can get lost.
Anyone should be able to count in the same places and the same way.

Procedure to recognize the 3rd wave

We’ll explain at the moment the downtrend turns to uptrend.

① Wave 1: The point where the retracement high is exceeded
The retracement high of the downtrend is surpassed.
At this point, the downward pattern is broken. This rise is counted as Wave 1.

② Wave 2: The subsequent pullback
After Wave 1 goes up, it pulls back briefly.
This dip is Wave 2.

③ Wave 3: The point where it extends again from Wave 2’s pullback
From Wave 2’s pullback, it rises again.
This is Wave 3.

In other words, to recognize Wave 3,
Waves 1 and 2 must be visible beforehand.

If you don’t know where Wave 1 is, you can’t find Wave 3.

In a rising trend, everything is the opposite when the trend shifts to a downtrend.
The point that breaks the swing high becomes Wave 1, the subsequent retracement is Wave 2, and the next move down is Wave 3.

Counting begins at the retracement high

Many who lose the 3rd wave are unclear where to start counting Wave 1.

“Somehow it got cheaper.”
“It started to rise significantly.”

By this, the counting method changes each time you look, depending on who you are watching.

The counting start is where the retracement high is exceeded.
If you fix this, Waves 1–3 won’t wobble.

Where the retracement high is can be identified by drawing a single horizontal line.

What you can learn from the video

・How to recognize Wave 3 like this
・In actual charts, scenes where you count Waves 1, 2, 3
・How to find the starting retracement high (pullback high) for starting to count
・A method to prevent thinking you’ve got Wave 3 when you’re still in Wave 1

This video is right for you if

・You studied Elliott Wave but cannot identify the 3rd wave
・Your counting of waves changes every time
・You want to use Elliott Wave more simply

Explanation video

Note: Key points from the video

・Count only Waves 1, 2, 3
・In a downtrend, the point where the retracement high is exceeded is Wave 1
・Wave 2 is the retracement after Wave 1, and Wave 3 is where it extends next
・To recognize Wave 3, Waves 1 and 2 must be visible beforehand
・In an uptrend, everything is opposite (the point where the pullback low is broken is Wave 1)

Summary: Before looking for Wave 3, verify only three things

1. Where is the retracement high (or pullback low in an uptrend)?
2. Has Wave 1 that exceeded it appeared already?
3. Has the pullback after Wave 1 (Wave 2) appeared?

When all three are present, you can recognize Wave 3.

Finally

If you want to capture Wave 3, first find Wave 1 before searching for Wave 3.

When Wave 1 is determined, Wave 2 becomes visible. When Wave 2 is visible, Wave 3 becomes clear.

Elliott Wave is often thought of as a difficult theory.
However, charts can be read well enough with just 1, 2, and 3.

Once you can recognize Wave 3, the next step is entry method and where to aim.
Please also read the two articles introduced at the beginning of this article.

The approach in this article can be used with currency pairs other than GOLD.
However, because each instrument has different price movements and trading conditions, the same results are not guaranteed.

Thank you for reading to the end.

For those who want to verify what you learned on video on your own chart.

This article explains trading philosophy. It does not recommend specific buying or selling actions, nor does it guarantee profits. Please make your own investment decisions.