2006issue C111-3
Four-leg Fibonacci reversal as an impulse wave checkpoint
After an extended decline, a four-leg reversal in the following consolidation can be read as a wave-2 location test. Point D is a wave-3 impulse hypothesis only when neighboring swings are equal, price holds the 0.618–0.786 XA pocket, and the count dies if price exceeds X.
- A four-leg reversal begins with a sharp XA advance after an extended decline and completes only when later legs sit inside their stated Fibonacci ranges and AB equals CD.
- The four-leg decline after XA is treated as a three-wave correction, typically wave 2 of a larger impulse wave, with wave 3 the next expected impulse segment.
- A support zone at D is where the AB-equal projection of CD meets a 0.618 or 0.786 Fibonacci retracement of XA; a print beyond X is treated as failure.
- Matching neighboring swing lengths is used to label impulse and corrective waves more consistently and to stay out of late trend-following entries inside the four-leg structure.
A four-leg reversal after the decline
After an extended decline, a four-leg reversal can form in the following consolidation. The structure begins with a sharp XA advance and completes only when each later leg sits inside its stated Fibonacci range.
The named tools in this workflow are the four-leg reversal, Fibonacci retracement, Elliott wave analysis, and the impulse wave. Swing symmetry is the check used to keep neighboring legs aligned before a new impulse segment is labeled.
Completion rules
In the bullish form, completion requires AB to equal CD, with D landing in a 0.618–0.786 Fibonacci retracement of XA and a 1.272–2.618 extension of BC.
The same four-leg geometry appears inverted as a bearish reversal, again with AB equal to CD.
How the count is assigned
Elliott wave analysis counts trending markets as five-wave impulse structures and corrections as three-wave structures. It assigns swing symmetry to waves 1 and 5 or to A and C of an A-B-C correction.
The four-leg decline after XA is treated as a three-wave correction, typically wave 2 of a larger impulse wave. Wave 3 is then the next expected impulse segment.
The D zone and invalidation
A support zone at D is defined where the AB-equal projection of CD meets a 0.618 or 0.786 Fibonacci retracement of XA. A print beyond X is treated as failure.
Any add is conditioned on a break of B, with the invalidation then moved just beyond D.
Measured objectives
The first measured objective is the 0.618 Fibonacci retracement of AD. A farther objective is the length of the preceding wave 1 projected from D as the minimum span of wave 3.
Historical GBP/USD illustrations
A 240-minute GBP/USD case shows two four-leg reversals at the start of a third impulse wave. That case includes a third-of-3 zone that combined the 0.618 XA retracement at 1.8368, a 1.0 AB-equal projection at 1.8381, and a 1.618 BC extension at 1.8384.
A later 120-minute GBP/USD example marks D after a 0.618 retracement, notes a long at 1.8865, and places resistance at the wave-1 high of 1.8999. That example is framed as a third wave inside a larger fifth wave.
Why neighboring swings are matched
Matching neighboring swing lengths is presented as a way to label impulse and corrective waves more consistently. It is also presented as a way to stay out of late trend-following entries inside the four-leg structure.
All readings on this track · 12 readings
- 2001Impulse-wave subcounts as a case-study filter
- 2006Wave 3 trend exits with pitchforks, channels, and Fibonacci
- 2006Four-leg Fibonacci reversal as an impulse wave checkpoint
- 2010An unfinished fifth wave blocked a second-wave count
- 2010Write the rubber-band long before the fill
- 2011A 5% trail cannot say whether the impulse-correction count is still alive
- 2012Wave counting as context before trade setups
- 2012A weekly-close test of impulse, correction, and the 61.8% stop
- 2013When wave templates fail under momentum override
- 2013Late momentum is a five-wave sentiment trap
- 2019Counting successive impulses after a productivity shock
- 2020Wave counts and Fibonacci targets as a falsifiable trade plan