Wave-by-wave channel construction for Elliott counts

Redraw after every completed swing

The historical workflow treats each newly completed swing as a construction step. As soon as the latest same-degree wave has reversed, the channel is redrawn and the next wave is checked against the new pair of lines.

A price channel is a pair of parallel lines drawn through completed same-degree swings to bound the next Elliott wave. Same-degree waves are swings that belong to one Elliott sequence and should remain enclosed by a single channel.

The channel is meant to keep those waves together and to mark a completion boundary, not an exact reversal price. In a rising channel, a longer developing wave implies a higher reversal area.

Semi-log scale and a failed channel

Elliott channels should be drawn on a semi-log scale, whether the chart is electronic or drawn by hand. Semi-log scale is the preferred chart scale for this work so percentage travel stays visually consistent.

If a newly drawn channel fails to behave as expected, that failure is a warning that the wave count may be wrong.

Impulse waves, one channel at a time

After wave 2 reverses, a line from the origin of wave 1 through the end of wave 2, plus a parallel from the wave-1 extreme, bounds wave 3. A pierce of that channel can indicate an extending third wave. An extended third is a third wave that travels through a previously drawn channel and therefore needs a new parallel taken from an earlier swing.

After wave 3 reverses, a line through waves 1 and 3 with a parallel from wave 2 is a minimum target for wave 4. An ending well short of that line should be checked as a possible second wave inside a still-developing third.

After wave 4 reverses, a line through waves 2 and 4 with a parallel from wave 3 bounds wave 5. A shortfall can mark a truncated fifth, a fifth wave that finishes well short of the channel drawn after wave 4. When the third wave was extended, the parallel is taken from wave 1 instead of wave 3.

Diagonal channels

In a leading or ending diagonal, a line from the origin of A through B bounds D, and a line from A through C bounds E, even though the pattern sides are not parallel. That construction is a diagonal channel: non-parallel motive boundaries that are still used, in sequence, to project later diagonal legs.

Zigzags, flats, and patterns that do not channel

In a zigzag or flat, including those nested inside combinations, a line from the origin of A through B with a parallel from A can target wave C. Triangles and expanded or running flats do not sit well in such channels.

Fibonacci ratios inside an idealized channel

An idealized five-wave layout can place a 0.618 retracement of wave 1 at wave 2, a 0.382 retracement of wave 3 at wave 4, and a fifth wave equal to 1.618 times wave 1 inside one channel. A Fibonacci retracement, in this sense, is a ratio between completed swings that, in an idealized count, can sit inside a well-formed channel. Such a perfect fit is rare.