Impulse Wave Pattern is a market movement comprised of five distinct sub-waves that move in the same direction as the larger trend. The Impulse Wave Pattern was first identified by Elliot Wave Theory, a method of technical analysis that looks at long-term trends and investor psychology in order to identify patterns that are likely to repeat.

The Impulse Wave Pattern has five sub-waves, each of which moves intra-trend: Wave 1 moves in the direction of the overall trend, Wave 2 is a correction or pullback to an area of support or resistance, Wave 3 is an extension of Wave 1, Wave 4 is a correction or pullback to an area of support or resistance, and Wave 5 is a final extension of Wave 1 and marks the end of the pattern. When the five waves of the Impulse Wave Pattern are complete, the overall trend should have reversed, and a new trend will have been established.

The way the Impulse Wave Pattern is identified is by understanding the long-term trend and investor psychology in order to recognize a price pattern that is likely to repeat. This type of technical analysis is used as a tool to predict future price movements by analyzing past patterns.

The Impulse Wave Pattern is an important tool that can be used by traders and investors to identify the potential direction of a trend, which can be used to determine when to initiate or close a position. This pattern is most useful when analyzing longer-time frames, such as weekly or monthly charts. It can also be useful in intraday charts, when the Wave Pattern is clearly visible.

The Impulse Wave Pattern is a valuable tool when trading and investing, enabling traders to recognize overall trends and capitalize on potential profits. By understanding the different components to the impulse wave, investors can identify new trends and take advantage of the resulting price movements.