Glossary term
Impulse Wave
The five-wave directional structure (1-2-3-4-5) in Elliott Wave theory — three in the trend direction, two corrective. Three hard rules make the count falsifiable; break one and the count is wrong, not just unlikely.
Definition & the Three Hard Rules
The impulse wave is Elliott Wave's core trending structure: five waves labeled 1-2-3-4-5, three in the trend direction (1, 3, 5) and two corrective interruptions (2, 4). Three hard rules make a count falsifiable: wave 2 never retraces beyond the wave-1 start (R1); wave 3 is never the shortest of waves 1, 3 and 5 (R2); wave 4 does not enter wave-1's price territory (R3). Any one violation means the count is wrong, not just unlikely — the structure has to be relabeled. This falsifiability is what separates impulse analysis from pattern-matching: a five-wave-looking rally that breaks R1 or R3 isn't an impulse, whatever its shape.
Extensions
In practice, one of the three motive waves — most commonly wave 3 — extends far beyond the other two, subdividing into its own five-wave impulse of the next lower degree. An extended third wave is the hallmark of a genuine trend acceleration: volume, momentum and participation typically peak inside it. Extensions in wave 1 or wave 5 happen but are less common, and a market rarely extends more than one of the three. Reading which wave extended matters for what comes next — an extended third implies waves 4 and 5 should be comparatively contained, while an extended fifth often precipitates a sharper-than-usual corrective retracement once the sequence completes.
Impulse vs. Diagonal
A diagonal looks superficially similar — five waves in the trend direction — but trades R3 for a converging, wedge-shaped channel: wave 4 is allowed to overlap wave 1's territory, something a true impulse never permits. Diagonals appear at the start of a trend (leading diagonal, wave 1 or A position) or at its exhaustion (ending diagonal, wave 5 or C position), and each of their five sub-waves tends to subdivide into three rather than five. The overlap is the clearest tell: if wave 4 has entered wave-1's price range, the count is either a diagonal or wrong outright — never a standard impulse. Closelook's chart terminals badge R1/R2/R3 automatically on any drawn count, and treat wave-4 overlap as legal only when the sequence is set to diagonal.