⚡️ABC correction wave pattern.
After the 5 impulse waves end, a corrective cycle begins with at least 3 corrective down waves (A-B-C). The correction process can be more complicated depending on the waveform, some correction cycles can last more than 3 waves.
⚡️Specifically, the Corrective Wave Model is part of the Elliott wave theory, a model that helps determine the main trend of the market. This pattern consists of three types of waves: wave A, wave B and wave C.
🔼 Wave A is the first bearish wave in a correction cycle. It is usually a very strong and short-term wave, which tends to occur with a clear downward momentum. After wave A, the market may have a smaller down wave, called wave B.
🔼 Wave B is a short-term up wave between wave A and C. Usually, wave B will decrease part of wave A. It is also usually a short-term up wave, but its upward momentum is usually not equal to the down wave of wave A. .
🔼 After wave B is wave C, which is the last bearish wave in the correction cycle. Wave C is usually the strongest bearish wave and lasts longer than wave A. When wave C completes, the market will continue to move according to the previous main trend.
⚡️ According to Elliott, there are up to 21 corrective wave models from basic to complex, but most are only deployed from 3 main models that I will update later. Hope it will help you on your path to becoming a professional trader⚡️
After the 5 impulse waves end, a corrective cycle begins with at least 3 corrective down waves (A-B-C). The correction process can be more complicated depending on the waveform, some correction cycles can last more than 3 waves.
⚡️Specifically, the Corrective Wave Model is part of the Elliott wave theory, a model that helps determine the main trend of the market. This pattern consists of three types of waves: wave A, wave B and wave C.
🔼 Wave A is the first bearish wave in a correction cycle. It is usually a very strong and short-term wave, which tends to occur with a clear downward momentum. After wave A, the market may have a smaller down wave, called wave B.
🔼 Wave B is a short-term up wave between wave A and C. Usually, wave B will decrease part of wave A. It is also usually a short-term up wave, but its upward momentum is usually not equal to the down wave of wave A. .
🔼 After wave B is wave C, which is the last bearish wave in the correction cycle. Wave C is usually the strongest bearish wave and lasts longer than wave A. When wave C completes, the market will continue to move according to the previous main trend.
⚡️ According to Elliott, there are up to 21 corrective wave models from basic to complex, but most are only deployed from 3 main models that I will update later. Hope it will help you on your path to becoming a professional trader⚡️
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1. Zig-Zag pattern (Zig-Zags wave)
The Zig-Zag pattern is a corrective waveform of the Elliott wave. The Zig-Zag pattern is a steep price movement that moves against the previous trend. Wave B is usually the shortest wave compared to wave A and wave C, and wave B cannot return to the starting point of wave A.
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2. Flat model (Wave Flats)
Flat waves are a corrective waveform of Elliott waves. In a flat pattern, the widths of the waves are usually equal, with wave B opposite the beginning of wave A and wave C opposite B. Note that sometimes wave B can still surpass the start of wave A.
Flat waves are a corrective waveform of Elliott waves. In a flat pattern, the widths of the waves are usually equal, with wave B opposite the beginning of wave A and wave C opposite B. Note that sometimes wave B can still surpass the start of wave A.
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3. Triangle model (Wave triangle)
The Triangle wave is a corrective wave pattern with 5 waves. The triangle pattern is a correction that is "locked" in two trend lines that are coming together or separating. A temporary triangle is created by 5 waves that go against the initial trend and are in a sideways state. This triangle can be an isosceles triangle, an ascending triangle, a descending triangle or an extended triangle.
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⚡️Applying the Eliott wave indicator to investing
🔼 Identifying the trend: The Impulsive Phase usually has a 5-wave structure, never 3. Therefore, when detecting an up or down phase with a small 5-wave structure inside, you can grasp it. catch the trend of that market.
🔼 Identifying the reversal zone: After identifying the trend with 5 wave sequences, investors can wait for the major correction period to take place and end. Usually the correction period ends at the 50% and 61.8% levels of the Fibonacci Retracement range. In case the wave increases strongly and steeply, the level of 38.2% will be the ideal adjustment level and bottom of the price. From there, investors can observe developments in these regions before making investment decisions.
🔼 Note: In big waves there are small waves, in impulse waves there are correction waves. The above are just the basic theories about Elliott waves, but to be able to draw waves, measure waves and count waves fluently, you need to spend more time researching, learning and practicing.
🔼 Identifying the trend: The Impulsive Phase usually has a 5-wave structure, never 3. Therefore, when detecting an up or down phase with a small 5-wave structure inside, you can grasp it. catch the trend of that market.
🔼 Identifying the reversal zone: After identifying the trend with 5 wave sequences, investors can wait for the major correction period to take place and end. Usually the correction period ends at the 50% and 61.8% levels of the Fibonacci Retracement range. In case the wave increases strongly and steeply, the level of 38.2% will be the ideal adjustment level and bottom of the price. From there, investors can observe developments in these regions before making investment decisions.
🔼 Note: In big waves there are small waves, in impulse waves there are correction waves. The above are just the basic theories about Elliott waves, but to be able to draw waves, measure waves and count waves fluently, you need to spend more time researching, learning and practicing.
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⚡️The main rules of Elliott wave are important rules that help investors apply Elliott wave theory accurately and effectively. Here are the main rules of Elliott waves:
🔼 Wave 2 must not decrease too much compared to the peak of wave 1
🔼 Wave 3 is never shorter than wave 1 or wave 5
🔼Wave 4 cannot penetrate the price area of wave 1
🔼Waves 2 and 4 often have different shapes, meaning if wave 2 was a flat decline, then wave 4 could be a spiral decline
🔼Waves 1, 3 and 5 are “strong” waves, while waves 2 and 4 are “weak” waves in the sequence.
🔼The second and fourth waves usually have a relative slope to each other. If wave 2 was a gentle slope, then wave 4 could be a lower slope.
🔼These rules help investors more accurately evaluate waves in the market and make appropriate trading decisions. However, applying Elliott wave theory requires experience and professional skills, so investors need to focus on research and practice skills to use this theory effectively.
🔼 Wave 2 must not decrease too much compared to the peak of wave 1
🔼 Wave 3 is never shorter than wave 1 or wave 5
🔼Wave 4 cannot penetrate the price area of wave 1
🔼Waves 2 and 4 often have different shapes, meaning if wave 2 was a flat decline, then wave 4 could be a spiral decline
🔼Waves 1, 3 and 5 are “strong” waves, while waves 2 and 4 are “weak” waves in the sequence.
🔼The second and fourth waves usually have a relative slope to each other. If wave 2 was a gentle slope, then wave 4 could be a lower slope.
🔼These rules help investors more accurately evaluate waves in the market and make appropriate trading decisions. However, applying Elliott wave theory requires experience and professional skills, so investors need to focus on research and practice skills to use this theory effectively.
Comment:
🔼Using Elliott waves requires experience and consideration. Investors need to pay attention to other factors such as economic information, market fluctuations and psychological factors to make the right decisions. Furthermore, identifying waves using this method is not always accurate, so investors should apply this method along with other tools and indicators to increase accuracy.
🔼 I end this article here, I wish you effective trading.
🔼 I end this article here, I wish you effective trading.
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Comment:
What are elliot waves?
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