For Business

Trends & Market Structure

Impulse and Corrective Waves Explained

An impulse wave is a leg of the price that goes with the trend, and a corrective wave is a leg that goes against it and gives back part of the last impulse. This paper shows you the euro's seven legs of 2025 drawn from its turning points and measured in pips, the idea as the pull and recovery of an oar stroke, the waves on the weekly chart, the legs laid end to end, and the object on your platform that letters a corrective wave A, B, C.

Difficulty
Intermediate
Reading time
5 min
Pages
8
Reviewed by
Saman Rahbar

This paper is locked

Read it in the browser and keep the PDF with Premium, or buy this one paper.

Buy this paper — $2Get Premium

Seven legs

A trend is made of legs, and the legs come in two kinds. The euro against the dollar rose from 1.01771 in January 2025 to 1.19189 in September in seven legs. Four went with the trend: 777, 692, 765 and 527 pips up, a pip being the fourth decimal place, the smallest step most people count in. Three went against it: 73, 508 and 438 pips down. The legs with the trend are called impulse waves. The legs against it are called corrective waves, because each one corrects part of the impulse before it.

The oar stroke

The picture is a rowing stroke. The pull moves the boat; the recovery, when the oar is lifted and brought back for the next pull, does not. The boat still goes one way, because every stroke has a pull that is bigger than its recovery. An impulse wave is the pull. A corrective wave is the recovery. A trend is a boat going forward stroke after stroke, and the recoveries are as much a part of rowing as the pulls.

This paper is locked

Read next