They are relatively easy to recognize and follow a few basic rules. Wave 3 always travels beyond the end of wave 1. Wave 3 is never the shortest of the impulsive sub-waves within a larger impulse wave. The next set of definitions and rules are still easy to keep in mind. As most casual observers of Elliott will criticize, there are many exceptions to the basic patterns.
Extensions occur when an impulse wave can be further subdivided into another set of five waves.
Diagonal triangles assume a wedge shape pointing in the direction of the larger trend. Corrective Waves Corrective waves, labeled with letters, move against the larger trend and represent the jockeying for position of buyers and sellers. This results in interesting shapes on the charts as the market is pulled against the trend and seemingly against its will. Not only do corrective waves take on a myriad of patterns, they also have their own variations. Zigzags are easily recognizable three waves structures against the larger trend.