Elliot Waves Complete Guide | Chapter 3.2 - "Flat-Expanded Flat"

Hello Traders. Welcome to Chapter 3.2, where we talk about another form of corrective waves, the Flat and Expanded correction. In chapter 3.2, we will be discussing Zig-Zag waves. This is where most people will get "chopped" up in the market, as these corrections can often cause a lot of small panics within these corrective waves. These corrections more often than not, destroy traders. If you learn even the basics of corrective Elliot Waves, you can use them to your advantage to identify if we are in a fakeout and identify whether you are in a corrective pattern or not.

Chapter 3 Glossary:

3.1 Zig-Zag Waves
3.2 Flat Correction , Expanded Flat
3.3 Running Flat, Contracting Flat
3.4 Barrier Triangle, Expanded Triangle
3.5 Double-Three
3.6 Triple-Three

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Flat Correction
The Flat correction is probably the second most common corrective pattern and always has a 3-3-5 structure. This can be a very confusing pattern for many as it's also known to cause a lot of losses for intraday traders - it's AKA a "choppy" market period.

As wave A is not five-waved and powerful enough, the retracement of wave B is considered strong. There are rules to this!

📌Rules:
• It's a sideways movement - Wave A and Wave B are corrective.
• Wave C is impulsive, but does not go much below Wave A.
• Most of the time, Waves B/C go some degree above or below of Wave A (just to trick people into believing a breakout occurs, hence, choppy!).
• Although it is called the Regular Flat Correction, it is not the most common one and the second most common consolidated corrective pattern.

❗The ABSOLUTE most important thing is to just observe in corrective waves unless you are a true day trader. Otherwise, watch for overall market structure to avoid overtrading in corrections since these are the most trickiest. Once you achieve an overall picture of the structure (about 70% through), you can start considering on entering a position to increase your probabilities and risk of not over trading.


Expanded Flat
The Expanded Flat is the second most common one under the flat corrections. Confused already? Go back and re-read everything.

• Expanded flat is a corrective wave pattern with an extended wave B, which reaches higher than the start of wave A.
• Wave B makes a fake breakout above the last high.
• Wave C is also extended and goes deeper than wave A.
• Structure of the correction is 3-3-5.

📌Rules:
• Wave B ends higher than the beginning of wave A
• Wave C is considered an impulse or ending diagonal and ends lower than the low of wave A.

❗ Wave B/C over and over again catch traders on the wrong side, as fake breakouts take place just before the market turns. This in turn creates a lot of traders to get destroyed in the market!

Trade Safe!

Below are the chapters from 1-3.1!

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Elliot Waves Complete Guide | Chapter 1 - "The Overall Cycle"

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Elliot Waves Complete Guide | Chapter 2.1 - "Motive Waves"

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Elliot Waves Complete Guide | Chapter 2.2 - "Ending Diagonal"

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Elliot Waves Complete Guide | Chapter 2.3 - "Extensions"

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Elliot Waves Complete Guide | Chapter 3.1 - "Corrective Waves"