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Corrective Patterns
Corrections are very hard to master.
Most Elliott traders make money during an impulse pattern
and then lose it during the corrective phase. An impulse
pattern consists of five waves. A corrective pattern
(with the exception of the triangle pattern) consists
of 3 waves. An Impulse pattern is always followed by
a Corrective pattern. Corrective patterns can be grouped
into two categories:
Simple Corrections
 There
is only one pattern in a simple correction. This pattern
is called a Zig-Zag correction. A Zig-Zag correction
is a three-wave pattern in which the Wave B does not
retrace more than 75 percent of Wave A. Wave C will
make new lows below the end of Wave A. The Wave A of
a Zig-Zag correction always has a five-wave pattern.In
two of the three types of complex corrections (Flat
and Irregular), the Wave A has a three-wave pattern.
Thus, if you can identify a five-wave pattern inside
Wave A of any correction, you can then expect the correction
to be a Zig-Zag formation.
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Wave
B
Usually 50% of Wave AShould not exceed 75% of
Wave A
Wave C
1 x Wave Aor 1.62 x Wave Aor 2.62 x Wave A
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Complex
Corrrections (Flat, Irregular, Triangle)
The complex correction group
consists of 3 patterns:
Flat Correction
 In
a flat correction, the length of each wave is identical.
After a five-wave impulse pattern, the market drops
in Wave A. It then rallies in a Wave B to the previous
high. Finally, the market drops one last time in Wave
C to the previous Wave A low.
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Irregular
Corrections
 In
this type of correction, Wave B makes a new high. The
final Wave C may drop to the beginning of Wave A or
below it.
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Fibonacci
Ratios in an Irregular Wave
Wave B = either 1.15 xWave A or 1.25 x Wave A
Wave C = either 1.62 xWave A or 2.62 x Wave A
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Triangle
Corrections
 In
addition to the three-wave correction patterns, there
is another complex corrective pattern that appears time
and time again. It is called the triangle pattern.The
Elliott Wave Triangle approach is quite different from
other triangle studies. The five sub-waves of a triangle
are designated A, B, C, D and E in sequence.
Triangles are, by far, most common
as fourth waves. One can sometimes see a triangle as
the Wave B of a three-wave correction. Triangles are
very tricky and confusing. One must study the pattern
very carefully prior to taking action. Prices tend to
shoot out of the triangle formation in a swift thrust.
 When
triangles occur in the fourth wave, the market thrusts
out of the triangle in the same direction as Wave 3.
When triangles occur in Wave Bs, the market thrusts
out of the triangle in the same direction as the Wave
A.
The Alteration Rule
If Wave 2 is a simple correction,
expectWave 4 to be a complex correction.If Wave 2 is
a complex correction,expect Wave 4 to be a simple correction.
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