What is an Impulse Wave?
Quick Answer: An impulse wave is the five-leg move in Elliott Wave Theory that drives price in the direction of the dominant trend with expanding momentum.
Understanding Impulse Waves
An impulse wave is the motive leg in Elliott Wave Theory where price moves strongly in the direction of the overarching trend. It consists of five sub-waves (1-2-3-4-5) and typically exhibits expanding volume and momentum.
Spotting Impulse Characteristics
Wave 3 is often the longest and never the shortest, while Wave 4 should not overlap Wave 1 in classic patterns. Traders use oscillators, momentum readings, and price structure to validate impulse development.
Entry Strategy
Many traders enter on pullbacks during Wave 2 or Wave 4, aiming to ride the next advance within the impulse sequence while keeping stops below structural support.
Risk Considerations
Elliott Wave labeling can be subjective. Combine impulse analysis with trend confirmation, multi-time-frame alignment, and fundamental catalysts to improve accuracy. Overfitting wave counts to price noise can lead to misaligned trades.
Subjective Labeling
Different analysts may assign different wave counts to the same chart. Keep risk small and be ready to invalidate the setup if price action contradicts your scenario.
Related Terms
Learn More About Forex Trading
Now that you understand impulse wave, explore our comprehensive guides: