Case Studies:
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Corrective Structures.
Overview. "Correction through time"
Running Flat, Expanded Flat, Regular Flat and Triangle are examples of “Correction through time”. Each of those types of correction patterns start with subwave a subdivided into three small subwaves. Any three wave move is always weaker than five wave move of the same degree. In each of those four types of corrective waves price stays withing a range created by the first subwave a. Only in Expanded Flat type of correction subwave c is able to push price beyond the point of completion of subwave a.
Corrective Structures.
Overview. "Correction through price"
Simple Zig-Zag is a perfect example of “Correction through price”. This is a type of a “deep” correction that pushes prices back down retracing a substantial part ( at least 61.8% ) of the preceding rally. This type of correction is able to push prices in a countertrend direction for a substantial distance because its actionery waves a and c have impulsive five wave structure. By the moment when the final wave c of a corrective Simple Zig-Zag pattern finds its bottom the goal is accomplished, bulls not only have lost confidence but they also do not even hope for continuation of the rally anymore.
- Introduction to Section 6 “Corrective Waves”.
- Simple Zig-Zag.
- Correction shaped as a Simple Zig-Zag.
- Regular Flat.
- Bonus: Trading corrective waves shaped as a Regular Flat.
- Running Flat.
- Expanded Flat.
- Correction Shaped as a Triangle.
- Bonus: Triangle can play dirty tricky games.
- Triangle: Key Takeaways.
- Wave B is the least predictable beast.
- Bonus.Wave B explained.
- Two types of corrective structures: “through time” vs “throw price”.
- Complex Corrective Pattern: Double Three.
- Guidance on Alternation Between Corrective Waves