FIBONACCI : IMPULSIVE and CORRECTIVE
Corrective Waves
The 5-wave trends are then corrected and reversed by 3-wave counter-trends.
Letters are used instead of numbers to track the correction.
Check out this example of a smokin’ hot corrective 3-wave pattern!
Just because we’ve been using a bull market as my primary example doesn’t mean the Elliott Wave Theory doesn’t work on bear markets.
The same 5-3 wave pattern can look like this:
Types of Corrective Wave Patterns
According to Elliott, there are 21 corrective ABC patterns ranging from simple to complex.
“Uh 21? I can’t memorize all of that! The basics of the Elliott Wave Theory are already mind-blowing!”
Take it easy, young padawan. The great thing about Elliott Wave is you don’t have to be above the legal drinking age to trade it!
You don’t have to get a fake ID or memorize all 21 types of corrective ABC patterns because they are just made up of three very simple easy-to-understand formations.
Let’s take a look at these three formations. The examples below apply to uptrends, but you can just invert them if you’re dealing with a downtrend.
The Zig-Zag Formation
Zig-zag formations are very steep moves in price that goes against the predominant trend.
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