Home Technical Analysis Elliott wave theory Understanding Motive Waves – Part I – The Fifth Wave

Understanding Motive Waves – Part I – The Fifth Wave

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The motive wave is the most profitable movement because it is the trend’s direction. Elliott, in his Treatise “The Wave Principle,” give special attention to the fifth wave. In this post, we’ll discuss the importance of this part of the movement.

The Basics

A motive wave contains five waves, where waves 1, 3, and 5, moves in the direction of the trend. These waves are known as motive or impulsive waves. Waves 2 and 4 are corrective waves (read more). The following chart shows the basic structure of an impulsive sequence.

The Fifth Wave

The importance of the fifth wave is the termination point. Elliott, in his Treatise, says that the termination point provides relevant information to speculators and investors. After the finalisation movement, the corrective move will be in a similar degree. For example, the end of the fifth wave in a cycle sequence will represent a corrective move in the same degree.

We must consider that the end of a movement must complete the five waves of a lesser degree. The following chart shows the fifth wave of a Primary sequence. Once is running, the fifth wave of a primary degree, the price must complete the five waves sequence in the intermediate degree. The same occurs for minor, minute, minuette, and sub-minuette degrees. (click on the top-right arrowed square to enlarge)

The conclusion

The reader doesn’t have to be forced to analyse any single degree. Elliott, in his works, explained mainly three degrees. It is a panoramic chart, an intermediate, and a minor degree.

To expand the comprehension of this post, visit our article “How to use channels to identify waves.”

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