# ELLIOTT WAVE THEORY - THE REVISED RULES The following are some of the revised Elliott Wave Theory rules I have discovered. They have never been published, but I have encountered them frequently enough in my own research to adapt them.

The "Original Elliott Wave Rules" were publicized in the "Elliott Wave Principle: Key To Market Behavior" book by A. J. Frost and Robert Prechter about 43 years ago.

## THE NEW ELLIOTT WAVE RULES

### [MOTIVE WAVES]

IMPULSE WAVES
IMPULSE WAVES
I. Wave 3 cannot be a diagonal.
I. Wave 3 can be a diagonal.

DIAGONALS

DIAGONALS
I. In a contracting diagonal, wave 1 should be the longest of waves 1 through 5.

II. In an expanding diagonal, wave 1 should be shorter than wave 3 and wave 3 should be shorter than wave 5.

III. In a leading diagonal, waves 1, 3, and 5 may either be ALL motive waves or ALL zigzags / combinations.

IV. Wave 2 of a diagonal cannot be a flat correction.

V. Wave 4 of a diagonal cannot be a triangle or a flat.

VI. No truncation is allowed in an expanding diagonal.
I. In a contracting diagonal, either wave 1 or wave 3 should be the longest. (*)

II. In an expanding diagonal, wave 3 should never be the shortest of waves 1 through 5.

III. In a leading diagonal, waves 1, 3, and 5 may be a motive wave or a zigzag / combination.

IV. Wave 2 of a diagonal can be a flat correction.

V. Wave 4 of a diagonal can be a triangle or a flat.

VI. Truncations in expanding diagonals may rarely happen.

### [CORRECTIVE WAVES]

ZIGZAGS
ZIGZAGS
— >
- no change -
FLATS
FLATS
I. Wave B of a flat cannot be a triangle.

II. Wave B of a flat should retrace at least 90% of wave A.
I. Wave B of a flat can be a triangle.

II. Wave B of a flat should retrace at least 80% of wave A. (**)
TRIANGLES
TRIANGLES
I. Wave A or wave B of a triangle cannot be a flat correction.

II. In an expanding triangle, wave A should be shorter than wave B.
I. Wave A or wave B of a triangle can be a flat correction.

II. In an expanding triangle, either wave A or wave B should be the shortest.
WXY / WXYZ COMBINATIONS
WXY / WXYZ COMBINATIONS
— >
- no change -

(*) - On a linear vs a logarithmic scale, the height of the same waves may differ. It may happen that wave 1 of a contracting diagonal is longer than wave 3 on a linear scale, but shorter on a log scale. As a result, the original rule may be confusing and quite often incorrect.

(**) - When wave B of a flat correction is a contracting triangle, it's acceptable to use wave A of the triangle, as opposed to the end of the correction (ie. wave E), to measure the 80% retracement.