Corrective Waves

3-wave countertrends then correct and reverse the 5-wave trends.

To track the correction, letters are utilized instead of numbers.

Take a look at this smokin' hot corrective 3-wave pattern!

The fact that I've been using a bull market as my major example doesn't mean the Elliott Wave Theory doesn't apply to bear markets.

This is an example of a 5-3 wave pattern:

Corrective Wave Patterns: What Are They and How Do They Work？

There are 21 corrective ABC patterns, according to Elliott, ranging from simple to complex.

“Uh, 21？” says the narrator. I'm not going to be able to remember everything! The Elliott Wave Theory's fundamentals are already mind-blowing!

Young padawan, take it easy. The beauty of Elliott Wave is that you don't have to be of legal drinking age to trade it!

You don't need a false ID or know all 21 sorts of corrected ABC patterns because they're merely three easy-to-understand structures.

Take a look at these three different formations. The examples below are for uptrends, but if you're dealing with a downtrend, simply invert them.

The Zig-Zag Pattern

Zig-zag formations are price movements that are highly sharp and run against the general trend.

When compared to Waves A and C, Wave B is usually the shorter.

In a correction, these zig-zag patterns can occur twice or even three times (2 to 3 zig-zag patterns linked together).

Each of the waves in zig-zag patterns can be split down into five waves, just like any other wave.

The Formation of the Flat

Simple sideways corrective waves make up flat formations.

In flats, the wave lengths are GENERALLY equal, with wave B reversing wave A's movement and wave C erasing wave B's movement.

We use the word “universal” because wave B can sometimes extend beyond the start of wave A.

The Triangle Arrangement

Triangle formations are corrective patterns that are defined by trend lines that are either converging or diverging.

Triangles are made up of five waves that move sideways against the trend. These triangles come in a variety of shapes.