Third Waves Are the Ones You Want to Catch

By Elliott Wave International

"Third waves are wonders to behold. They are strong and broad.

They usually generate the greatest volume and price movement and are most often the extended wave in a series."

-- Elliott Wave Principle, Frost and Prechter, p. 78

Of the five waves in an Elliott impulse, the 3rd wave is the one you want to catch.

And you definitely don't want to be on the wrong side of one.

These idealized charts show you what I mean.

Every Elliott fan has a handful of favorite 3rd waves.

Mine? Bitcoin in 2020.

In April 2020 -- amid the COVID-19 panic -- Elliott Wave International's analysts told subscribers:

"Bitcoin (BTC) is in the very early stages of a wave (3) rally... keep the focus on higher."

Result: Bitcoin rocketed from 7,000 to nearly 65,000 in a year.

Not every 3rd wave is this dramatic, of course.

Bitcoin in 2020 is an important reminder that 3rd waves are most often the longest and strongest move in an Elliott impulse.

Want to learn more about the Elliott Principle? This handy reference guide teaches you the basics in 30 minutes (it's free).

This article was syndicated by Elliott Wave International and was originally published under the headline Third Waves Are the Ones You Want to Catch. EWI is the world's largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.