Ultimate Elliott Wave Cheat Sheet

5/26/2021 Ultimate Elliott Wave Cheat Sheet - Trading Kingdom
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Table of Contents 
Ultimate Elliott Wave Cheat Sheet
1. What is the Elliott Wave Theory?
2. Motive Waves Published by Trigger Trades on June 20, 2020
2.0.1. Impulse:
2.0.2. Diagonal:
3. Corrective Waves
3.0.1. Zigzag:
3.0.2. Flat:
3.0.3. Triangle:
3.0.4. Combination Correction:
4. Wave Formation
4.0.1. Guideline of Alternation:
5. Elliott Wave Notation
What is the Elliott Wave Theory?

Named after Ralph Nelson Elliott, the Elliott Wave Theory is a method of technical analysis that
identi es for recurring price patterns related to cycles in investor sentiment and psychology.
The theory isolates waves identi ed as motive waves that form a trend, and corrective waves
that counter the trend.
The idea is that each set of waves is ingrained within a larger set of waves that follow the same
impulse/corrective pattern, described in fractality.
What is this?
This is a cheat sheet to use along your journey of becoming an elite elliotician. This will
absolutely help with the learning curve and also be an excellent resource to have quick access
https://www.tradingkingdom.net/2020/06/20/ultimate-elliott-wave-cheat-sheet/ 1/21
to all the major rules, guidelines, structures, and Fibonacci measurements.

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For more in-depth analysis on Elliott Waves, download & STUDY Elliott Wave Principle, known
as “The Bible of the Elliott Wave Theory”, (Yes, it’s free!!).
Let’s Begin.
The Three Cardinal Rules:
Wave 2 cannot more than 100% of wave 1

Wave 3 cannot be the shortest of the three impulse waves
Wave 4 cannot overlap with the price territory of wave 1 (Except in the rare event of a
diagonal triangle pattern)
Motive Waves
Impulse:
An impulse is the most common motive wave, which is always subdivided into ve waves (1-3-5
up, 2-4 down [or vice versa]). They move in the same direction of the trend, and are the easiest
to recognize.
Rules:
An impulse consists of 5 internal waves.

Wave 1 and 5 always have to be an impulse, or a diagonal (Leading for wave 1 – Ending for
wave 5)
Wave 3 always has to be an impulse.

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Wave 3 can never be the shortest wave
It can be shorter than wave 1 or 5, but never the shortest
Wave 2 cannot retrace more than 100% of wave 1
Wave 2 can be any corrective pattern
Except a triangle
Wave 4 can be any corrective pattern
Wave 4 can never move beyond the end of wave 1 (Otherwise it is a diagonal)
Guidelines:
Wave 1 is the least common wave to extend

Wave 5 should end with momentum divergence (RSI is the simplest oscillator to spot this)
Wave 5 can fail to go beyond the end of wave 3
This is called truncation, but it is not very common
Truncation gives warning of underlying weakness or strength in the market
Wave 3 usually has the greatest extension
Occasionally two waves will extend
Never will all three waves extend
When wave 3 extends, wave 5 tends to equal wave 1 in length
Waves 2 and 4 tend to create alternation between each other
See last page for more details on alternation
Wave 2 typically retraces to deeper levels of wave 1, than wave 4 does relative to wave 3
Wave 2 usually forms as a zigzag or double/triple zigzag
Wave 4 usually forms as a triangle, double/triple threes, or at
Extended waves can contain exaggerated subdivisions within them
Usually two of waves 1, 3 & 5 exhibit a Fibonacci ratio
Channel lines and Fibonacci targets are inferior to the wave count
In most cases, wave 3 has the highest volume
If volume during the 5th wave is as high as the 3rd, an extended 5th wave is
expected
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Fibonacci Extension & Retracement Ratios:
Wave 2 – Retracement
50%, 61.8%, 65%, 78.6%, or 88.6% of wave 1
Wave 3 – Extension
161.8%, 200%, 261.8%, or 323.6% of wave 1

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Wave 4 – Retracement
14.6%, 23.6%, or 38.2%, 40% of wave 3
Ideally it should not exceed more than 50%
If wave 4 does exceed 50% of wave 3, consider a di erent count, but do not
rule it out
Wave 5 – Extension
Equal (100%) to wave 1
Wave 5 is 61.8% of waves 1+3
Diagonal:
Diagonals move within two channel lines drawn from waves 1 to 3, and from waves 2 to 4.
There are two types of diagonals; leading and ending. This is dependent on if they form at the
start (leading) or end (ending) of an impulse wave, or the form of wave A (leading) or C (ending)
of a zigzag.
There are also two wedge forms for leading diagonals; Contracting and Expanding
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Contracting Diagonal:
Wave 3 should be shorter than wave 1

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Expanding Diagonal
Wave 3 should be longer than wave 1

Rules:
Leading diagonal subdivides into 5-3-5-3-5

Ending diagonal subdivides into 3-3-3-3-3
Leading diagonal can only form in subdivisions of wave 1 in an impulse, or in wave A in a
zigzag
Ending diagonal can only form in subdivisions of wave 5 in an impulse, or wave C in a
zigzag
Diagonals must move within the two channel lines or be within 10-15% of total movement
Wave 2 must not retrace more than 100% of wave 1
Wave 4 never moves beyond the end of wave 2
Wave 3 must be greater than wave 2 by price
The trend lines must converge, slope in the same direction
Cannot be horizontal
Guidelines:
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Diagonals are usually identi ed by overlapping wave 1 and 4
There are cases where it does not overlap, but that should be last resort
If wave 5 is smaller than wave 3, contracting diagonals can overshoot its trend line during
wave 5
This is called a throw-over
Contracting ending diagonals can also undershoot its trend line during wave 5
This is called truncation
If wave 1 is a leading diagonal, wave 3 is usually extended
Decrease in candle size that takes a long time to increase in price on low volume is a
strong signal that an ending diagonal is occurring
This shows a decrease in momentum
Odds favor ending diagonals being followed by a strong reversal as the preceding trend is
exhausted
Contracting Diagonal:
Wave 2
61.8% to 88.6% of wave 1
Wave 3
78.6% to 100% of wave 1
Wave 4
38.2% to 50% of wave 3
Wave 5
61.8% to 100% of wave 3
Expanding Diagonal:
Wave 2
61.8% to 88.6% retracement of wave 1
Wave 3
127.2% to 161.8% of wave 1
Wave 4
61.8% to 88.6% retracement of wave 3
Wave 5
127.2% to 161.8% of wave 3
Corrective Waves
Zigzag:
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Zigzag is a corrective 3 wave structure (5-3-5) labelled as A-B-C. The top of wave B is
prominently lower than the start of wave A. Occasionally, there will be multiple zigzags that form
when it does not reach its measured target. These are called double zigzags and triple zigzags.
Rules:
Wave B may not move beyond the start of wave A

Waves A & C must subdivide into ve waves
Impulse or diagonal
Can only have one diagonal in Wave A or C
Wave B can be any 3 wave corrective pattern
Guidelines:
Fits well into a parallel channel

Wave C normally ends beyond the end of wave A.
If it does not, it is a truncation
The ratio between A and C is usually equal to 100%
Zigzags can become extended into double or triple zigzags
They are labeled W-X-Y (double zigzag) and W-X-Y-Z (triple zigzag)
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Wave B
50%, 61.8%, 78.6% or 88.6% retracement of wave A
Wave C
61.8%, 100%, or 161.8% extension of wave A
Waves A and C
Usually equal in length (100%)
Flat:
A at correction is an A-B-C corrective move structured 3-3-5. The stronger the trend, the
briefer the at tends to be. There are three types of ats: Regular, Expanding, & Running
Rules:
Waves A & B must subdivide into threes (ABC)

Wave C must subdivide into ve waves (impulse or diagonal)
Wave A cannot be a triangle
Guidelines (Fibonacci Ratios Included):
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Regular Flat:
B ends about the start of A (can be a little beyond)

Wave B must be minimum 90% of wave A (If it ends at 85%, it should be considered)
Usually 90-105% of wave A
C ends about the end of A (100%-105%)
If wave C fails to extend beyond wave A, it is considered a truncated C wave
Expanded Flat:
B must be minimum 105% of A

Usually between 105%-138% of wave A
C usually ends substantially beyond the end of A

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Wave C = 123.6% – 161.8% of wave A-B
Most Common
Running Flat:
B ends beyond the start of A

Wave B = 123.6% of wave A
C fails to move beyond the end of A
Wave C = 61.8% – 100% of wave A-B
Wave C is truncated
Least common, but very bullish or bearish depending on the direction of the trend
Triangle:
A Triangle is a common 5 wave pattern labeled A-B-C-D-E that moves counter-trend, and is
corrective in nature. Triangles move within two channel lines drawn from waves A to C to E, and
from waves B to D, usually on declining volume.
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Rules + Guidelines:
Contracting Triangles:
Top trendline declining, bottom rising

Wave E either overshoots or undershoots the A-C trendline
Four of the ve subdivision waves must be zigzags
It should not have more than one complex corrective wave
Most common triangle
Barrier Ascending/Descending Triangles:
*Same as the above contracting triangles except the following:
Top trendline at, bottom rising for ascending

Vice versa for descending
The B-D, or A-C-E trendline is horizontal
The movement out of the triangle is a short sharp thrust or extended fth wave
Expanding Triangle:
Top trendline rising, bottom declining

Very rare
Fibonacci Extension & Retracement Ratios: *Triangles rarely follow retracement rules*
Contracting and Symmetrical Triangles:
In a triangle, at least two waves frequently have a 61.8% relationship with their prior wave.
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a running triangle wave B should not go beyond 161.8% of wave A
Expanding Triangles:
As a general rule, these triangles conform to 161.8% relationships between the waves
B, C, & D may not be longer than 150% of the preceding subdivision wave
E may be longer
Combination Correction:
A double three or triple three combination is a complex corrective pattern. It occurs when
simple corrective waves develop together into a larger corrective structure. They are usually
horizontal in structure.
Rules:
Composed of two or (three) ABC corrective patterns separated by one (or two) corrective
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pattern(s) in the counter direction, labeled “X”
The rst corrective pattern is labeled W, the second Y, and if there is a third, “Z”
Doubles are denoted as A–B–C–X–A–B–C or abbreviated as simply W–X–Y.
A double presents itself as a 7 wave corrective structure
Triples are denoted as A–B–C–X–A–B–C-X-A-B-C or abbreviated as W–X–Y-X-Z
A triple presents itself as a 11 wave corrective structure
Doubles are common, Threes are rare
There cannot be more than one zigzag in a combination
There cannot be more than one triangle in a combination
Guidelines:
Double threes and triple threes are horizontal in formation

If a zigzag or at looks too small to be the entire wave with respect to the preceding wave,
a odds favor a combination is forming
Wave ‘X’ can be any corrective pattern, but is usually a zigzag
Double Three:
Wave X
50%, 61.8%, 76.4%, or 85.4% retracement of wave W
Wave Y
61.8%, 100%, or 123.6% extension of wave W
Cannot pass 161.8% of wave W
Triple Three:
Wave X
50%, 61.8%, 76.4%, or 85.4% retracement of wave W
Wave Z
61.8%, 100%, or 123.6% extension of wave W
Wave Y
Cannot pass 161.8% extension of wave W
Wave Formation
Guideline of Alternation:
The guideline of alternation is a warning to expect a di erence in the next expression of a wave.
Impulse Waves:
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The guideline of alternation states if wave 1 is short, then wave 3 is likely to be extended, and
wave 5 likely to be short again.
If wave 1 is extended, then wave 3 and 5 are most likely not extended. If neither wave 1 nor
wave 3 is extended, then wave 5 probably will be extended.
If wave 3 is extremely long and overstretched, wave is 5 more in danger of being truncated.
Corrective Waves:
The guideline of alternation states that if wave 2 of an impulse is sharp, complex, and deep (in
retracement), expect wave 4 to be a sideways, simple, & shallow, and vice versa.
Elliott Wave Notation
Thanks for reading!!
Again, for more in-depth insight on Elliott Wave analysis, download and STUDY Elliott Wave
Principle (It’s free!).
Follow me on Twitter for real time Elliott Wave analysis: @TriggerTrades
Subscribe to my YouTube: https://www.youtube.com/c/triggertrades
>What is the Ell

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>Motive Waves</s
>Impulse: </stro
>Diagonal:</stro
>Corrective Wave
>Zigzag
>Flat: </
>Triangle:</stro
>Combin
>Wave Formation<

>Guideline of Al
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5/26/2021 Ultimate Elliott Wave Cheat Sheet - Trading Kingdom

What is the Elliott Wave Theory?

to all the major rules, guidelines, structures, and Fibonacci measurements.

The Three Cardinal Rules:

Wave 2 cannot more than 100% of wave 1

An impulse consists of 5 internal waves.

Wave 3 always has to be an impulse.

Wave 1 is the least common wave to extend

Fibonacci Extension & Retracement Ratios:

161.8%, 200%, 261.8%, or 323.6% of wave 1

Wave 3 should be shorter than wave 1

Wave 3 should be longer than wave 1

Leading diagonal subdivides into 5-3-5-3-5

Fibonacci Extension & Retracement Ratios:

Wave B may not move beyond the start of wave A

Fits well into a parallel channel

Fibonacci Extension & Retracement Ratios:

Waves A & B must subdivide into threes (ABC)

Guidelines (Fibonacci Ratios Included):

B ends about the start of A (can be a little beyond)

B must be minimum 105% of A

C usually ends substantially beyond the end of A

B ends beyond the start of A

Top trendline declining, bottom rising

Barrier Ascending/Descending Triangles:

*Same as the above contracting triangles except the following:

Top trendline at, bottom rising for ascending

Top trendline rising, bottom declining

Contracting and Symmetrical Triangles:

Double threes and triple threes are horizontal in formation

Fibonacci Extension & Retracement Ratios:

Elliott Wave Notation

Thanks for reading!!

Follow me on Twitter for real time Elliott Wave analysis: @TriggerTrades

Subscribe to my YouTube: https://www.youtube.com/c/triggertrades

><strong><span style="color:#11b55e" class="has-inline-color">What is the Ell

><span style="color:#d802f9" class="has-inline-color"><strong>Diagonal:</stro

><span style="color:#ed2769" class="has-inline-color"><strong>Corrective Wave

><span style="color:#56be26" class="has-inline-color"><strong>Zigzag</strong>

><strong><span style="color:#1714cb" class="has-inline-color">Flat: </span></

><span style="color:#ffb413" class="has-inline-color"><strong>Triangle:</stro

><span style="" class="has-inline-color"><strong><font color="#081feb">Combin

><strong><span style="color:#6e058f" class="has-inline-color">Wave Formation<

><br><strong><span style="color:#69ac12" class="has-inline-color">Elliott Wav

><span class="ez-toc-section" id="What_is_the_Elliott_Wave_Theory?"></span><s

><span class="ez-toc-section" id="Motive_Waves"></span><span style="color:#07

><span class="ez-toc-section" id="Diagonal"></span><span style="color:#d802f9

><span class="ez-toc-section" id="Flat"></span><strong><span style="color:#17

><span class="ez-toc-section" id="Triangle"></span><span style="color:#ffb413

><span class="ez-toc-section" id="Elliott_Wave_Notation"></span><br><strong><

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