How to Trade Impulse Waves
Wave 3 is the move most traders want. Here is the compact playbook for taking it.
Updated August 2026 · 2 min read
Entry
Wait for a completed five-wave move, then look for the wave 2 pullback into the 50–61.8% retracement of wave 1. Enter as price turns back in the direction of the trend.
Stop and target
- Stop — just beyond the start of wave 1; below it the count is invalid.
- Target — 161.8% of wave 1 measured from the wave 2 low.
- Manage — trail behind wave 4 once wave 3 extends.
Train the setup
The edge comes from repetition on live-looking charts. WaveMaster's exercises let you place counts, entries and invalidation levels on real market data.