Depending on your approach and the degree of waves or timeframe that you're trading, you'll typically want to start taking profits as wave 5 looks like it's nearing completion. That is true for long or short positions. In the case of short positions, I'm referring to 5 waves down in a larger degree correction.
The reason being, after wave 5 completes, you can expect a retracement of one larger degree. For example, if you went long in minor wave 1 and rode the position all the way through minor wave 5, you'd probably want to start selling as prices approached the end of wave 5, or once the larger degree correction begins. Otherwise you risk giving back much of your profits instead of carrying them on to your next trade. In such an example, if the correction were of primary degree, you risk giving back all your profits and riding the trade into a loss.
If you're new to Elliott Wave, it can be confusing to think about 5 waves moving down instead of up, but that is actually the case we're in right now. There are 5 waves down of smaller degree (minuette) in the chart above. These waves are subwaves of a larger ABC retracement which is moving down.
Really appreciate such in-depth explanations, thank you, sir! In this case I will treat the end of a minuette wave 5 as a potentially good opportunity to scale in in anticipation of a larger move up.
I have re-read your last comment: "Given that minuette wave (iii) was greater than 1.618% of wave (i), I'm expecting that (iii) will be the longest wave in this move.". Did you mean minuette wave (ii) was greater than 1.618% of wave (i)?
Yes, assuming the wave count is correct, the end of minuette wave (v) would be a good place to start to scale in to a long position.
There is one caveat however. It's possible for corrective waves to develop additional complexity. That is, it's possible that intermediate wave (2) will develop another leg once minor wave Y completes (see wxyxz patterns).
To account for additional complexity developing, it's important to always know the point where the trade is wrong and get out at that point. There are no guarantees in the market, just probabilities which may be slightly weighed in your favor ;)
No, the statement was accurate. Wave (ii) cannot be longer than wave (i) or it wouldn't be a valid wave (ii). That is, wave (ii) is not allowed to retrace more than the length of wave (i). If you ever see a count which suggests that, it's an inaccurate count as it would break a cardinal rule of EW.