Do not chase the 5th wave. Wait for the A-B-C correction to materialize.
Typically retraces 50%, 61.8%, or 78.6% of Wave 1. A deep retracement is a hallmark of a Wave 2.
Several excellent resources offer free PDF downloads: Elliott Wave Cheat Sheet Mento Pdf
Frequently equals 100% or 161.8% of the length of Wave A. Quick Reference Summary Table Primary Rule / Guideline Typical Fibonacci Target Wave 1 Starts the new trend cycle; heavily sub-divided. Base starting point Wave 2 Corrective Cannot retrace 100%+ of Wave 1. 50% to 61.8% of Wave 1 Wave 3 Cannot be the shortest wave; high volume. 161.8% to 261.8% of Wave 1 Wave 4 Corrective Cannot overlap with Wave 1 price territory. 38.2% of Wave 3 Wave 5 Often shows momentum divergence on indicators. Equals Wave 1, or 61.8% of Waves 1-3 Wave A Corrective Initial reaction; can look like a minor 5-wave drop. Target depends on correction type Wave B Corrective Bull/Bear trap; higher low or lower high. 38.2% to 61.8% of Wave A Wave C Corrective Strong, aggressive liquidation wave. 100% to 161.8% of Wave A How to Trade Using This Cheat Sheet
Enter long as price begins to reverse, or place a buy-stop order just above the peak of Wave 1 to catch the breakout. Do not chase the 5th wave
Several practical recommendations elevate the PDF from reference to routine:
Elliott Wave Cheat Sheet is a popular technical analysis resource that condenses complex market patterns into single-page references for quick use. It is primarily designed as a supplement for traders who already understand the basics of the theory but need to verify specific rules and Fibonacci ratios on the fly. Amazon.com Core Elliott Wave Rules A deep retracement is a hallmark of a Wave 2
Even seasoned analysts make mistakes when applying Elliott Wave theory. Avoid these mental traps to keep your analysis sharp:
Wave 3 is never the shortest impulse wave among Waves 1, 3, and 5. It is frequently the longest and strongest wave.