# 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 ORIGINAL ELLIOTT WAVE RULES

## THE __NEW__ ELLIOTT WAVE RULES

### [MOTIVE WAVES]

DIAGONALS

DIAGONALS

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.

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]

II. Wave B of a flat should retrace at least 90% of wave A.

II. Wave B of a flat should retrace at least 80% of wave A. (**)

II. In an expanding triangle, wave A should be shorter than wave B.

II. In an expanding triangle, either wave A or wave B should be the shortest.

(*) - 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.