✅ What It Means
• Wave 3 has extended to 3.618× the length of Wave 1, which is a very strong impulsive wave.
• This often indicates high momentum and strong underlying trend (usually confirmed with high volume).
• It’s a classic sign of an extended wave structure — common in high-volatility, trend-driven markets.
⸻
🔄 Wave 4 Retracement Behavior
In such cases, Wave 4 tends to be shallow, both in price and time. Here’s what we know:
🔍 Typical Wave 4 Retracement When Wave 3 = 3.618 × Wave 1:
Type
Typical Behavior
Depth (Fibonacci)
0.236 to 0.382 of Wave 3
Time
Often longer than Wave 2
Form
Often sideways: triangle, flat
Probability of Deep Retrace
Low (< 25%)
So when Wave 3 is extended, Wave 4 usually does not retrace deeply.
📊 Historical/Educated Probability Estimate
Event
Probability
Wave 3 extends to 3.618× Wave 1
~10–15% of impulsive wave cases
Wave 4 retraces shallowly (0.236–0.382)
~70–80% in extended Wave 3
Wave 4 retraces deeply (>0.5)
~10–15% (rare, usually corrective failure)
So:
🧠 If Wave 3 is extended (3.618×), there is ~70–80% chance that Wave 4 will be shallow and not violate Wave 1 top.
📌 Summary
• ✅ Wave 3 extended to 3.618× implies strong trend
• ✅ Wave 4 likely shallow (0.236–0.382 retrace)
• ❌ Deep retrace into Wave 1 territory is unlikely unless structure is failing
• Wave 3 has extended to 3.618× the length of Wave 1, which is a very strong impulsive wave.
• This often indicates high momentum and strong underlying trend (usually confirmed with high volume).
• It’s a classic sign of an extended wave structure — common in high-volatility, trend-driven markets.
⸻
🔄 Wave 4 Retracement Behavior
In such cases, Wave 4 tends to be shallow, both in price and time. Here’s what we know:
🔍 Typical Wave 4 Retracement When Wave 3 = 3.618 × Wave 1:
Type
Typical Behavior
Depth (Fibonacci)
0.236 to 0.382 of Wave 3
Time
Often longer than Wave 2
Form
Often sideways: triangle, flat
Probability of Deep Retrace
Low (< 25%)
So when Wave 3 is extended, Wave 4 usually does not retrace deeply.
📊 Historical/Educated Probability Estimate
Event
Probability
Wave 3 extends to 3.618× Wave 1
~10–15% of impulsive wave cases
Wave 4 retraces shallowly (0.236–0.382)
~70–80% in extended Wave 3
Wave 4 retraces deeply (>0.5)
~10–15% (rare, usually corrective failure)
So:
🧠 If Wave 3 is extended (3.618×), there is ~70–80% chance that Wave 4 will be shallow and not violate Wave 1 top.
📌 Summary
• ✅ Wave 3 extended to 3.618× implies strong trend
• ✅ Wave 4 likely shallow (0.236–0.382 retrace)
• ❌ Deep retrace into Wave 1 territory is unlikely unless structure is failing
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.