The impulse wave 12345

The impulse wave is the engine of the trend. When momentum is strong and expanding on MACD 4C, prices move in five successive waves we count as 1 2 3 4 5: three waves driving with the trend (1, 3 and 5), and two small corrective waves between them (2 and 4).

The structure of the five waves

• Wave 1 — the first launch in the direction of the new move.
• Wave 2 — a correction that retraces part of wave 1 without fully swallowing it.
• Wave 3 — usually the strongest and longest wave in momentum, and the heart of the impulse.
• Wave 4 — a calmer correction, usually staying above the top of wave 1.
• Wave 5 — a final push that ends the impulse, often accompanied by weakness in momentum that foretells the approaching correction.