#套利交易策略

📘 Wave Theory Course

Second Lesson: Structure and Rules of the Five Impulse Waves (1-2-3-4-5)

The most basic trend structure in wave theory is the "Five Impulse Waves," representing the main direction of market movement. These five waves have a clear order and characteristics.

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🌀 Structure as follows:

1️⃣ First Wave:

• Initial market rise, usually weak, with most people still not believing that a reversal has begun.

2️⃣ Second Wave:

• Retracement wave, correcting the first wave, but cannot drop below the starting point. This wave often leads to doubts about whether the rebound is a false signal.

3️⃣ Third Wave:

• The strongest and longest wave, market sentiment begins to become euphoric, and trading volume increases, marking the main upward phase.

4️⃣ Fourth Wave:

• Again corrects, but usually more gently, with a small retracement, preparing for the upcoming fifth wave.

5️⃣ Fifth Wave:

• The final upward wave, market becomes overly optimistic, often displaying false breakouts, divergences, and other phenomena.

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✅ Key Rules (must remember):

• The third wave must absolutely not be the shortest wave (but it doesn't have to be the longest either)

• The second wave cannot drop below the starting point of the first wave

• The fourth wave cannot enter the price range of the first wave (unless in special structures, such as wedges)

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These five wave shapes constitute a complete upward trend.