Elliott Wave Forex Trading : Corrective Waves (2)
The flat correction also consists of three wave patterns labeled A-B-C but its subordinate waveforms form 3-3-5 waves. The characteristic of this correction is the weak correction of the C wave which often fails beyond the wavelength A. The flat correction often follows a strong impulse wave and more often arises as wave 4 than wave 2 of the impulse wave. Flat correction has three subcategories: ordinary flat correction; Extended flat correction and flat correction run.
Regular Flat Correction
In plain flat correction, wave B tends to be a 100% retracement of wave A and wave C tends to be slightly higher than the 100% retracement of Wave B, which ends slightly further than Wave A.
The extended flat correction has the shape of a megaphone with wave B that travels beyond wave A and wave C that travels beyond wave B.
Flat Correction Walk
Flat corrections run very rarely and are similar to extended flat corrections with the exception that wave C fails to move beyond wave B and also fails to reach the end of wave A.
The triangle correction consists of five waves labeled A-B-C-D-E with a subordinate wave forming a 3-3-3-3-3 wave pattern. They reflect the balance of strength between bullish and bearish. In the ideal triangle correction, each successive wave will fail to reach the 100% retracement of the previous wave. However, not infrequently the B wave exceeds the beginning of the A wave. Sometimes an expanded triangle is formed when each wave is more than a 100% retracement of the previous wave. The triangle is formed by connecting the end points of waves A and C and the ends of waves B and D. Triangles always occur in wave 4 impulses and are usually followed by fast and short fifth waves that travel the approximate distance from the widest part of the triangle.
Combination correction is usually a horizontal correction that forms a combination of three simple wave correction, such as zigzag correction, flat correction and triangular correction. However, the combination correction may end in a triangle correction but can not start with a single correction. Each of the simpler correction patterns that make up the combination correction is separated by an intervening wave having three subordinate waves as this is a correction in the correction. Combination correction occurs more often in the fourth wave.