Skip to main content
Track Wave counting
12 / 16
Search the archiveLibrary
Library

2013issue C0652-58

Constructing a 1-2-3 wave count from high-low zigzag swings

A 1-2-3 wave count begins by drawing a High-low zigzag through successive highs and lows. Wave numbering is applied only after those Swing point candidates are in place, and the swing engine changes state only when a Reversal threshold is crossed.

  • The 1-2-3 wave count starts as a High-low zigzag, so only those turning points are candidates for numbered waves.
  • Wave numbering is applied after the zigzag is in place, then used to form expectations for the next move rather than to decorate the chart.
  • The swing engine keeps an Uptrend state, Downtrend state, or Undefined state and updates a running maximum high and minimum low only when a new extreme is printed.
  • Until a Reversal threshold is crossed, intervening bars are unfinished swing development, not new wave labels.
Entries in this reading3 entries
Current trackWave counting23 readingsSwing chart34 readingsElliott wave analysis94 readings

Draw the zigzag before you number waves

The 1-2-3 wave count construction begins by drawing a High-low zigzag through successive highs and lows so that only those turning points become candidates for numbered waves. That High-low zigzag is the Swing chart layer: its turning points are the only Swing point candidates later used in Wave counting and Elliott wave analysis.

Wave numbering is applied after the zigzag is in place, and the resulting pattern is then used to form expectations for the next move rather than to decorate the chart.

Daily Apple high-low zigzag swings into April 2013

On daily Apple the high-low zigzag keeps only the swings that survive the reversal test, so the path is a run of lower highs and lower lows rather than a bar-by-bar trace. Wave numbers are still off. Turning prices were read from the eSignal daily window that printed 434.29 on 8 April 2013; dates of the vertices follow the January–April month ticks and are approximate to a few sessions.
On daily Apple the high-low zigzag keeps only the swings that survive the reversal test, so the path is a run of lower highs and lower lows rather than a bar-by-bar trace. Wave numbers are still off. Turning prices were read from the eSignal daily window that printed 434.29 on 8 April 2013; dates of the vertices follow the January–April month ticks and are approximate to a few sessions.AAPL · D · 2012-12-01T00:00:00.000Z to 2013-04-08T00:00:00.000Z

The eSignal study line lists zigzag percent 5, 5-bar ATR lookback and ATR factor 1.5. Vertex dates are estimated from month labels; prices are read against a 20-dollar grid and are approximate to a few dollars.

Hold the trend state until the reversal threshold

The swing engine keeps an explicit Uptrend state, Downtrend state, or Undefined state, updating a running maximum high and minimum low only when a new extreme is printed.

A confirmed reversal requires price to travel a Reversal threshold from the opposite extreme, using a high-pivot fraction of the prior maximum high or a corresponding add-on to the prior minimum low. Until that Reversal threshold is crossed, the construction stays in the current trend state and treats intervening bars as unfinished swing development rather than new wave labels.

Rebuild the zigzag from OHLC bars

The same High-low zigzag can be rebuilt from OHLC bars by exposing adjustable inputs for zigzag percent, ATR lookback, ATR factor, and the color and thickness of the plotted trendlines. Default construction knobs shown in one implementation include a 5 percent zigzag filter, an ATR length of 5, and an ATR factor of 1.5, all meant to be tuned in the study editor.

The same turning-point algorithm can be computed outside a charting platform, with sensitivity controls used to include smaller swings or to treat them as noise.

Educational research material, not investment advice. Historical source context does not establish present-day performance.
12 of 16 in the Wave counting track
201359-62 pp.Next on Wave countingStep candle confirmations with wave count and chandelier exitTreat the 1-2-3 wave count as the setup and the step-candle pattern as confirmation only, not as a stand-alone entry.
All readings on this track · 16 readings
  1. 1991Wave counting as a sampling frame for head and shoulders
  2. 1995Constructing a percent-reversal wave filter
  3. 1995Filtered waves, overdue duration, candles, and trend
  4. 1995Filtered swing ledger for MW pattern construction
  5. 2003Three ratio tests from a completed supercycle
  6. 2004Wave labels as a checklist for expansion versus contraction
  7. 2010Constructing wave-ratio signals from a quadratic trend filter
  8. 2011A temporary placeholder while source evidence is loaded
  9. 2011Construct a harmonic impulse from measured three-wave limbs
  10. 2012Three Fibonacci rules to label trend versus countertrend
  11. 2013Sentiment wave counts before news headlines
  12. 2013Constructing a 1-2-3 wave count from high-low zigzag swings
  13. 2013Step candle confirmations with wave count and chandelier exit
  14. 2016Nested wave rhythms and double-bottom support
  15. 2016Nested correction-size bands and a derived support price
  16. 2020Counting a Nasdaq correction before stacking Fibonacci targets
By fieldWaves and ratios90 readingsBy year201398 readings
All 23 readings tagged Wave counting
Also on Wave counting5 readings
1995Constructing a percent-reversal wave filter1995Filtered swing ledger for MW pattern construction2001Impulse-wave subcounts as a case-study filter2003Three ratio tests from a completed supercycle2004Testing a 1987 stock and gold analog by wave degree