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Corrective Pattern

Now that five waves have been completed in the direction of the major trend, they too will be corrected in a three wave retracement. To avoid confusion with the numerically labeled five wave impulsive sequence, letters are used to represent the three wave corrective swings. Within the same bull swings Wave A is down, Wave B is up and Wave C is again down.

Corrections are very hard to master. Most Elliott traders make money during an impulse pattern and then lose it back during the corrective phase.

An impulse pattern consists of five waves. With the exception of the triangle, corrective patterns consist of 3 waves. An impulse pattern is always followed by a corrective pattern. Corrective patterns can be grouped into two different categories :
  1. Simple Correction (Zig-Zag)
  2. Complex Correction (Flat, Irregular, and Triangle)

All of these can come in two styles: sharp or sideways corrections. A sharp correction is just like it sounds, moving quickly against the larger trend. A sideways correction is more sedate. It is a correction, but price tends to move horizontally over time whereas a sharp correction is more vertical.


Polls
Flat and Zig-Zag pattern
Fibonacci relationships are evident in corrective waves too, both internally and externally. Internally as to how Wave A, Wave B, and Wave C relate to one another and externally by the way the entire corrective process relates to the previous five wave swing. A Flat is distinguished from the more common Zig-Zag by the depth of Wave C in relation to Wave A.

The three wave corrective phase of Elliott Wave has the folowing rules that govern its shape :

  1. Corrective waves can head up or down.
  2. The corrective phase is composed of three waves and never five, as againt Impulses.
  3. The corrective phase aligns against the trend of one higher degree (a counter trend move).
  4. An initial five wave move against the prevailing price trend is not the end of a correction.

Elliott wave

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