Wave Equality
Wave equality is a guideline stating that two of the three impulse waves (1, 3, and 5) tend to be equal in price distance. This is one of the most practical Fibonacci relationships in Elliott Wave analysis. The most common application occurs when Wave 3 extends. In that scenario, waves 1 and 5 tend toward equality. You measure the price distance of Wave 1 and project that same distance from the end of Wave 4 to estimate where Wave 5 will complete. If waves are not exactly equal, they often relate by a Fibonacci ratio such as 61.8% or 161.8%. Wave equality gives you a concrete price target rather than a vague directional bias. It works across all timeframes and all markets. The guideline is not a rule, so it will not invalidate your count if it does not hold perfectly. But when a wave equality target lines up with other Fibonacci levels or support and resistance zones, the confluence creates a high-probability reversal zone. Traders use this to set profit targets and to identify where trend changes are most likely.
Apple stock completes Wave 1 from $150 to $180, a $30 move. Wave 3 extends from $170 to $230. Wave 4 corrects to $215. To project Wave 5, you add $30 (the Wave 1 distance) to $215, giving a target of $245. Price rallies to $243 and reverses. The near-perfect wave equality between waves 1 and 5 confirmed the end of the impulse. A trader who set a take-profit order at $244 captured the move within $1 of the high.