Forex Elliot Waves: Wave Motives (1)
As is well known, the Elliott Wave pattern has a motive phase (waves) consisting of five waves and a corrective phase consisting of three waves moving counter-trending. In this article, we will discuss about wave motive.
Price Action (PA) in motive wave moves toward the trend of a larger wave from one higher level. In larger motive waves, subordinate waves 1, 3, and 5 are including motive waves. Meanwhile in larger corrective waves, subordinate waves A and C also include motive waves as they move toward larger waves (previous trends). Motive waves tend to provide better trading opportunities because they are often easier to label than corrective waves.
Wave Motive Characteristics
Wave 1 is part of the basic process for the next move towards the trend. This is often seen as a correction by those who have mistakenly seen the previous A-B-C correction as the dominant trend.
Wave 2 reiterates the view that the previous A-B-C correction is the dominant trend as it begins to retrace (returns) back to wave 1. This explains why wave 2 is often a sharp retracement to wave 1.
Wave 3 is usually the most powerful wave as most market participants now realize which trends are going on. With more market participants, wave 3 often has momentum and moves further and longer than wave 1.
Wave 4 is a 3 wave correction that fails to follow the euphoria that gives a boost in wave 3. A retracement of wave 4 often lasts longer than wave 2 although its length is less than wave 2.
Wave 5 is the final push but market participants do not have the same level of commitment as wave 3. Thus, it has no momentum as found in wave 3 and may even fail to break the level achieved by wave 3.