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Corrective Structures.
REGULAR FLAT
Regular Flat is a much more tricky corrective structure than a Simple Zig-Zag. In general we expect any corrective pullback to follow a-b-c structure. However, the first corrective leg A in Regular Flat is shaped as a-b-c. That essentially means that you can not be sure whether the first pullback shaped as a-b-c is all of the corrective structure or only the first leg down in wave A. After the first leg structured as a-b-c we get another move in direction of the main trend but it fails to violate the top of the previous rally in impulsive wave. That wave b up creates a double top. However, it is a very weak setup to fade that double top. Because there are two more variations of the flat structure, Running Flat and Expanded Flat, where wave B manages to make a higher high over the preceding top only to drop hard in the final wave C down.
MAIN FEATURES
- The Regular Flat structure is subdivided into three waves a, b and c
- Waves a down and b up are subdivided into three subwaves
- Wave c down is subdivided into five subwaves
- Wave b up makes a double top retesting the top of preceding rally in an impulsive wave
- The final wave C is strong enough to push price back down to retest the low reached by wave a down
- 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