In Elliott Wave Theory, after a 5-wave impulsive move, markets typically enter a 3-wave corrective phase. These corrections move against the prevailing trend and are labeled A, B, and C instead of numbers.
🔄 What Is a Corrective Wave?
Corrective waves are countertrend moves that follow the dominant 5-wave trend. Whether you’re in a bull or bear market, these 3-wave patterns help identify when a retracement or reversal is likely to occur.
Corrective waves consist of:
- Wave A: Initial countertrend move.
- Wave B: Partial retracement.
- Wave C: Continuation of the countertrend.
📊 Example:
- In an uptrend, the ABC correction would look like a pullback.
- In a downtrend, it’s simply flipped in the opposite direction.
🧩 Types of Corrective Wave Patterns
Elliott identified 21 variations of ABC corrective waves, but don’t worry — they all stem from just three core formations:
1️⃣ Zig-Zag Correction
A Zig-Zag is a steep correction that moves sharply against the main trend.
- Structure: 5-3-5
- Wave B is usually the shortest.
- Can repeat as double or triple zig-zags.
- Found in both uptrends and downtrends.
📝 Tip: Each wave (A and C) can be broken down into smaller 5-wave structures.
2️⃣ Flat Correction
A Flat is a sideways correction where all waves are typically similar in length.
- Structure: 3-3-5
- Wave B often retraces all or more of Wave A.
- Wave C ends near the start of Wave A.
- Common in consolidation phases.
3️⃣ Triangle Correction
Triangles are formed by 5 waves (A-B-C-D-E) that move sideways, bounded by converging or diverging trendlines.
- Types:
- Symmetrical
- Ascending
- Descending
- Expanding
- Usually found in Wave 4 or B of a larger pattern.
✅ Key Takeaways
- Corrective waves counter the main trend and help identify potential entry/exit points.
- The three most common corrective formations are: Zig-Zags, Flats, and Triangles.
- These patterns are universal — applicable to forex, stocks, crypto, or commodities.
📌 Mastering these patterns gives traders an edge in anticipating market reversals and trend continuations.
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