Master the Elliott Waves: The Guide that Professional Traders Don't Want You to Know

If you still confuse Elliott waves with tea leaves (tea leaves), don't worry. But after reading this, you will have a real advantage over 90% of traders who simply “follow the trend” without understanding what is happening underneath.

The Secret: Fibonacci + Waves = Predicting the Market

Elliott's theory is not magic, it's patterns. And patterns come with numbers: Fibonacci retracement levels are your GPS in this chaos. Let's go wave by wave.

Wave 1: Where It All Begins

It is the zero point. The market awakens after a previous correction and begins to build buying or selling pressure (. There are no retracements to measure here, but this wave sets the stage for everything that comes after. Traders still doubt whether it is a real move or a trap.

Wave 2: The Fright that Separates the Weak from the Strong

Now things are happening. The price is plummeting brutally. Traders are running away, taking profits, and this is where many abandon the trend prematurely.

Critical levels:

• 61.8% → The most common correction )! Here the stops hurt! (
• 50% → Moderate correction
• 38.2% → Surface correction

Golden rule: If wave 2 retraces more than 100% of wave 1, the pattern is broken. It invalidates everything. So if you see it, get out.

Wave 3: The Atomic Bomb of the Market

This is where professionals make money. Wave 3 is usually the longest and most explosive of the entire sequence. Why? Because by this time, everyone sees the trend. The news confirms it. The sentiment is there. The momentum is unstoppable.

What to expect:

• Slight retracement or almost nothing after wave 2 )23.6% max(
• Typical extension: 161.8% of wave 1
• In strong markets: It can reach 261.8% or even 423.6%

This is the wave where the market is in “full flight”. Those who entered in the scare of wave 2 are now in massive profit territory.

Wave 4: The Strategic Pause )Here Beginners Fail(

The market is taking a breather. Unlike wave 2 ) which is brutal (, wave 4 is slower, more lateral. Consolidation, sideways ranges, triangles. The market seems “lazy”, but it's just the prelude.

Common Retracements:

• 38.2% → The most common
• 23.6% → Very shallow retracement
• 50% → Rare, but valid

Key rule: Wave 4 must never overlap with wave 1. If it does, your counting is wrong. Review.

Many traders come out here thinking that the trend has ended. Big mistake.

Wave 5: The Last Push )But Not the Strongest(

We have reached the end. Wave 5 is the last kick before the correction. It is usually driven by late speculators and pure FOMO. Less powerful than wave 3, but still significant.

Typical levels:

• 61.8% retracement of wave 4 ) within wave 5(
• 38.2% )superficial retracement(
• Extension: It can equal wave 1 or reach 161.8% of it.

After: The Correction A-B-C )Get Ready to Lose What You Gained(

Once the 5 waves close, the A-B-C correction enters. And yes, it retraces a significant part of the entire movement. Typical levels: 50%, 61.8%, 38.2%.

This correction can be quick )panic selling( or slow )orderly distribution(, but it is inevitable.

How the Pros Do It: Real Tactics

1. Fibonacci Tools on your platform → Use the Fib retracement. Everyone has it. Mark the key levels in 5 seconds.

2. Confluence = Money → When Fibonacci aligns with previous supports/resistances, the probability explodes. That's where the real pros come in.

3. Confirm with indicators → RSI, MACD, volume. Waves 2 and 4 especially need extra confirmation. Don't rely solely on theory.

4. Stay flexible, bro → The market doesn't read books. If the pullbacks skip the expected levels, reassess your count. Ego kills traders.

The Summary You Need to Remember

Wave 2 and 4 = Your entry/exit Wave 3 = The biggest profit Wave 5 = The warning that the correction is coming

If you master these levels, you have a map. You know where to buy, where to take profits, and where the stops should be. It’s not perfect, but it’s much better than throwing darts.