A Textbook Third-Wave Setup

One of the most exciting wave setups you can spot on a chart is a third wave. Even more exciting? A third wave at multiple degrees.

Elliott Wave Principle defines this as an extension (get your free online version of Elliott Wave Principle):

“An extension is an elongated impulse with exaggerated subdivisions… In the stock market, the most commonly extended wave is wave 3.” – Section 1.6

Check out this EURJPY call from our Currency Pro Service analyst, Favio Poci, to see the power of third waves in action:

EURJPY: 8/25/2022 9:43 AM

Outlook: Possible end of a three-wave corrective pullback in wave ((ii)). Looking for bullish evidence in wave ((iii)).

And here’s what happened next: