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Corrective Patterns of Elliott waves


As we know from the previous article, Elliott has recognized motive and corrective waves. The motive waves have been already explained, so let's take a look at corrective ones.  Corrective waves are moves against the trend of greater degree. The resistance from the motive wave prevents a correction from developing full motive structure (another motive wave). As the result of these two balanced forces, the patterns, which were defined by Elliott are much more complicated than motive ones. Corrective patterns fall into 4 categories:



Zigzag 

 (5-3-5*,  3 types - single, double and triple)

Flat

 (3-3-5*,  3 types -  regular, expanding and running)

Triangle 

( 3-3-3-3-3* - A,B,C,D,E - four types: 3 of contracting variety(ascending, descending, symmetrical) and one expanding type (reverse symmetrical)

Combination 

 (double three and triple three)

* represents wave count

ZigZags 

It's the simplest correcting structure, which is built by 3 waves of bigger degree(A,B,C) and 5-3-5 waves (for example A has 5 less significant waves - see picture) of  smaller degree. Zigzags can occur multiple times - 2 or 3 times in a row, mainly if the first zigzag doesn't reach the meant target. This behavior is labeled by an intervening "three", labeled as X and Ys, eventually with Zs (if it is triple zigzag) and are called as double zigzag, eventually triple zigzags.

Double zigzag(triple zigzag looks kind of same)

Flats 

Flat is also one of the simpler structures, is built by 3 waves (A,B,C), but differs from zigzag by another wave count, which is 3-3-5. It also retraces less of preceding impulsive wave than already mentioned pattern  does, because it lacks sufficient downward force to unfold into 5 wave pattern. This behavior is then inherited by wave B and it terminates near the start of wave A. The wave C continues in corrective pattern, but terminates  just slightly below the end of wave A, as opposed to zigzag, whose wave C is much stronger. The stronger the impulsive wave was, the higher chance is, that Flat will be created. Elliott has identified 3 types of flats:

Regular Flat - the wave B terminates to the level of the beginning of wave A and wave C terminates slightly below the end of wave A
Expanded Flat - the wave B terminates beyond the starting level of wave A and wave C terminates substantially below the end of wave A (this flat is the most common one)
Running Flat - the wave B terminates well beyond the beginning of wave A as in expanded flat, but wave C fails to travel its full distance and never reaches the end of wave A.



Triangles 

Triangles are 5 wave structures, which subdivide as 3-3-3-3-3 and are labeled as A,B,C,D,E in Elliott theory. They usually represent balance force between buyers and sellers,  causing sideways movement, which is followed by decreased volume and volatility. They fall into 4 main categories:


Combinations

The Elliot named and defined 2 combinations, named as double threes and triple threes. It is mostly combination of previous corrective patterns (zigzag, flat and triangle). While a single three is any zigzag or flat pattern, a triangle is allowable final component of combinations and this pattern in context is called "three". A double or triple three is then combination of similar types of corrections, including various forms of zigzags, flats or triangles. As with double or triple zigzags, each simple corrective pattern is labeled as W, Y, Z. The reactionary wave, labeled X, can take any form of mentioned patterns, but is mostly zigzag. The combinations are usually horizontal in character and have sideways movement. The rule is that the pattern can't have more than one triangle or zigzag,  triangles are also in 100% of cases the final component of combinations.


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