Elliott desce cero: Pauta de Impulso con 3ª Onda Extendida

Upward Elliott Wave Impulse with an Extended Third Wave (X3)

David Trullás presents an introductory method for identifying an upward Elliott Wave impulse with an extended third wave (X3). He focuses on a simplified set of rules and trading practices he uses, rather than covering every Elliott Wave guideline.

Core rules and characteristics

• X1, X3, and X5 indicate which impulse wave—wave 1, 3, or 5—is extended. In an X3 pattern, wave 3 is extended.
• The three main impulse rules are:
  1. Wave 2 must not retrace beyond the start of wave 1.
  2. Wave 3 cannot be the shortest of waves 1, 3, and 5.
  3. Wave 4 must not enter the price territory of wave 1.
• Wave 3 is often around 1.618 or 2.618 times the length of wave 1, though other Fibonacci relationships can occur. An extended wave 3 may itself subdivide into another impulse pattern.
• Waves 1 and 5 often have similar lengths, known as the rule of equality, though Fibonacci-related alternatives are possible.
• Waves 2 and 4 should alternate in corrective form. For example, if one is a flat, the other is generally a zigzag or triangle; they should not have the same corrective shape. Trullás also describes wave 2 as often faster and more direct, while wave 4 is often more prolonged and complex.
• Wave 4 often retraces toward the area of the fourth subwave within wave 3.
• Wave 5 generally rises above wave 3’s high. Its peak may coincide with bearish divergence in indicators or lower volume than at wave 3’s peak. These are possible clues, not entry signals by themselves.
• A fifth-wave failure occurs when wave 5 does not exceed wave 3’s high. Trullás says this is relatively uncommon and can be followed by a sharp, fast reversal. He plans to cover it in a separate chapter.
• He also states that wave 5 should have at least a Fibonacci relationship to wave 4, citing 38.2% as a minimum.

Example and trading approach

The example uses Netflix (NFLX). Trullás says the chart illustrates that common tendencies—such as a 1.618 or 2.618 wave-3 extension and equality between waves 1 and 5—do not always hold, even when the pattern otherwise appears to meet the key rules.

His described short-trade framework is:

1. Draw a trend line connecting the ends of waves 2 and 4, then project it forward.
2. Treat a break below the 2–4 line as a potential short-entry signal. Bearish divergence alone is not enough to enter.
3. Place the stop just above the wave-5 high, allowing for the instrument’s tick size or spread. Examples include:
   • An index tick of 0.25 points
   • A $0.01 spread for a stock around $3
   • A $0.50 spread for a stock around $1,000
4. Manage the short as price falls rather than using a fixed take-profit level. Reassess at support and watch for bullish divergence or declining volume as possible reasons to consider exiting.

Execution choices may vary: a trader might enter on the initial break or wait for a pullback or retest. A gap below the 2–4 line may also affect whether to enter immediately or wait. Trullás gives 2%, 3%, and 5% gaps as examples to assess and says he would not short after an unusually large 23% gap.

Assets, markets, and indicators mentioned

• Netflix (NFLX): Chart example
• S&P 500 and Nasdaq: Index examples for tick size
• Stocks, futures, and Forex: Markets that may require different stop calculations
• RSI, MACD, stochastic oscillator, and CCI (rendered as “ICC” in the subtitles): Examples of technical indicators
• Volume: Used as a possible divergence signal

Disclosure

The presenter states that the material is personal opinion and educational content, not a recommendation to buy or sell. Investment decisions remain the viewer’s responsibility.

Presenter and source

• Presenter: David Trullás, associated with Live in Trading
• Acknowledged source and teacher: Enrique Santos, whom Trullás credits with teaching him Elliott Wave theory.