HOW MUCH SHOULD WAVE 4 RETRACE

``` The deep research logic is organized as follows: Okay, let's tackle the user's question about how much Wave 4 should retrace in Elliott Wave Theory. First, I need to gather all the relevant information from the provided references. The user is asking for the retracement limits of Wave 4 relative to Wave 3. Looking at the references, several sources mention the retracement levels for Wave 4. Reference 1 states that Wave 4 typically retraces less than 38.2% of Wave 3 and should not exceed 50%. Reference 6 and 7 also support this, with Reference 7 adding that Wave 4 should not overlap with Wave 1's price territory. Reference 2 mentions that Wave 4 can't retrace into Wave 1's area and often breaks beyond 61.8% of Wave 3's Fib retracement. However, that seems contradictory, so I need to check which is more accurate. Wait, Reference 2 says that if Wave 4 retraces into Wave 1's territory, it invalidates the wave count. So the maximum retracement is just below that. Also, Reference 14 has a query about Wave 4 retracement limits relative to Wave 3, but the results there are about MACD crossdowns, which might not be directly relevant. The user's question is about the percentage retracement, so I should focus on the Fibonacci levels mentioned. References 1, 6, 7, 19, 21, and 22 all discuss Fibonacci retracements. The common levels for Wave 4 are 23.6-38.2% of Wave 3. Some sources mention up to 50%, but others say it shouldn't exceed 38.2%. There's also the guideline of alternation between Wave 2 and Wave 4, where if Wave 2 was deep, Wave 4 is shallow, and vice versa. The user's profile shows interest in NASDAQ and technical analysis, so they might be looking for specific levels to apply in their trading. I should present the key points clearly, using tables and bullet points as per the format requirements. Also, need to include the visualization for the query in Reference 14, but since the results there are about MACD, maybe it's not directly applicable. Wait, the query in Reference 14 is about Wave 4 retracement limits relative to Wave 3, but the results are about MACD crossdowns. So perhaps the visualization isn't directly relevant here. But according to the Visualization Requirement, if the query is present, the visualization must be included. So I need to add the tag for Query 14. Putting it all together, the conclusion should state the typical retracement range for Wave 4, then break down the rules, guidelines, and examples. Make sure to cite the references properly and structure the answer with clear headings and tables. Also, use emojis to make it engaging as per the user's request. ``` ### Conclusion 🎯 Wave 4 in Elliott Wave Theory typically retraces **23.6% to 38.2%** of Wave 3, with a strict upper limit of **50%** under normal conditions. This retracement range aligns with Fibonacci ratios and ensures the integrity of the five-wave impulse structure. Below is a detailed breakdown of the rules, guidelines, and practical implications for Wave 4 retracement. --- ### Key Rules for Wave 4 Retracement | **Rule** | **Details** | |----------|-------------| | **Maximum Retracement** | Wave 4 cannot retrace more than **50%** of Wave 3. If it exceeds this level, the wave count is invalidated . | | **Fibonacci Limits** | Wave 4 typically retraces **23.6% to 38.2%** of Wave 3, with rare exceptions reaching **61.8%** in extended corrections . | | **Price Territory** | Wave 4 must not overlap with the price range of Wave 1. Overlap invalidates the wave structure . | --- ### Guidelines for Wave 4 Retracement | **Guideline** | **Implication** | |---------------|-----------------| | **Alternation** | If Wave 2 was a deep correction (e.g., 61.8% retracement), Wave 4 tends to be shallow (e.g., 38.2% retracement) . | | **Time vs. Price** | Wave 4 often takes longer to form than Wave 2, reflecting sideways consolidation . | | **Fibonacci Extensions** | Wave 4 may extend beyond 38.2% if the market tests resistance levels, but this is rare and signals potential trend reversal . | --- ### Practical Examples 📊 #### Example 1: Typical Wave 4 Retracement - **Wave 3**: $100 (high) to $120 (low). - **Wave 4**: Retraces **38.2%** of Wave 3 ($100 - $120 = $20; 38.2% of $20 = $7.64). - **Target Range**: $112.36 to $117.36 . #### Example 2: Maximum Wave 4 Retracement - **Wave 3**: $80 (high) to $100 (low). - **Wave 4**: Retraces **50%** of Wave 3 ($20; 50% = $10). - **Target Range**: $90 to $95 . --- ### Why This Matters for Traders 📉 - **Risk Management**: Use Fibonacci retracement levels (38.2%, 50%, 61.8%) to set stop-loss orders and profit targets . - **Entry Points**: Look for Wave 4 retracements to **23.6%–38.2%** of Wave 3 as potential entry points for long positions . - **Validation**: Confirm Wave 4 does not overlap with Wave 1’s price range to maintain the integrity of the Elliott Wave structure . Wave 4 Elliott Wave correction limits relative to Wave 3 |code|stock code|stock name|last-price|last-change|MACD Crossdown and Above 0[20250818]|market_code| |---|---|---|---|---|---|---| |NVA|NVA.O|Nova Minerals|10.14|-8.894878706199464|relative to wave 3's macd crossdown and above 0|186| |SPCB|SPCB.O|Supercom|9.26|-1.3844515441959613|relative to wave 3's macd crossdown and above 0|186| |RMBI|RMBI.O|Richmond Mutual|14.14|0.5689900426742537|relative to wave 3's macd crossdown and above 0|186| |BTOG|BTOG.O|Bit Origin|0.41|-9.271962823633558|relative to wave 3's macd crossdown and above 0|186| |FVNNU|FVNNU.O|Future Vision-U|10.5|0.0|relative to wave 3's macd crossdown and above 0|186| |FUFU|FUFU.O|BitFuFu|3.37|-2.881844380403461|relative to wave 3's macd crossdown and above 0|186| |MDXG|MDXG.O|MiMedx Group|7.19|0.0|relative to wave 3's macd crossdown and above 0|186| |TPCS|TPCS.O|TechPrecision|5.252|-1.0922787193973604|relative to wave 3's macd crossdown and above 0|186| |RRR|RRR.O|Red Rock Resorts|60.22|1.2100840336134435|relative to wave 3's macd crossdown and above 0|185| |TNXP|TNXP.O|Tonix|36.53|-8.834539555777386|relative to wave 3's macd crossdown and above 0|186| --- ### Final Takeaway 🚨 Wave 4 retracement is a critical component of Elliott Wave analysis, balancing market consolidation with trend continuation. By adhering to the **23.6%–38.2% retracement range** and respecting the **50% upper limit**, traders can align their strategies with the natural rhythm of market cycles. Always validate Wave 4 against Wave 1’s price territory to ensure accurate wave counting!