First wave extensions are pretty rare even for the currency markets. However, they are important as almost exclusively point toward end (or the beginning of the end) of a previous move, usually suggesting a possible terminal impulse (rising wedge) in formation.
As the name suggests, such an extension calls for 161.8% for the first wave compared with the third one, and the beauty of it comes from the fact that the rules of an impulse still need to be respected, namely the third wave cannot be the shortest one, and because of that you have a maximum and a minimum value for targeting the fifth wave.
Usually such an extension appears as being part of a wedge, and this kind of patterns are to be found mainly at the ending of a move.
The recording that comes with this sub chapter will show you such a case we had recently on the usdjpy pair and this situation came right in the form of such an extension that made a terminal impulse for a fifth wave to the upside.
With this the second chapter that deals with impulsive move is covered and it is time to move on to corrections, the most tricky and challenging part of the Elliott Waves Theory.