How a Zigzag Differs from a Flat - A Basic Elliott Lesson

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How a Zigzag Differs from a Flat - A Basic Elliott Lesson
Learn about the key differences between two common patterns

By Jill Noble
Mon, 04 Jun 2012 16:00:00 ET

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The big picture of Elliott wave analysis is five-wave patterns followed by three-wave patterns. If you want to know more about how to count the waves within those patterns, the following lesson is for you!

(Editor's note: on June 14, Senior Tutorial Instructor, Wayne Gorman will hold a LIVE Q&A session for beginners, FREE with purchase of our educational DVD set>>).

The lesson below describes "flat" vs. "zigzag" corrections, and how to recognize the difference on a price chart.

A flat correction differs from a zigzag in that the subwave sequence is 3-3-5, as shown below.

Since the first impulse wave, wave A, lacks sufficient downward force to unfold into a full five waves as it does in a zigzag, the B wave reaction, not surprisingly, seems to inherit this lack of countertrend pressure and terminates near the start of wave A.

Wave C, in turn, generally terminates just slightly beyond the end of wave A rather than significantly beyond as in zigzags.

In a bear market, the pattern is the same but inverted, as shown here:

Flat corrections usually retrace less of preceding impulse waves than do zigzags. They participate in periods involving a strong larger trend and thus virtually always precede or follow extensions. The more powerful the underlying trend, the briefer the flat tends to be.

Within impulses, fourth waves frequently sport flats, while second waves do so less commonly.

What might be called "double flats" do occur. However, Elliott categorized such formations as "double threes"...

The word "flat" is used as a catchall name for any A-B-C correction that subdivides into a 3-3-5. In Elliott literature, however, three types of 3-3-5 corrections have been identified by differences in their overall shape. In a regular flat correction, wave B terminates about at the level of the beginning of wave A, and wave C terminates a slight bit past the end of wave A, as we have shown above.

Far more common, however, is the variety called an expanded flat, which contains a price extreme beyond that of the preceding impulse wave. Elliott called this variation an "irregular" flat, although the word is inappropriate as they are actually far more common than "regular" flats.

Adapted from Elliott Wave Principle

Ready to learn more about how to use the Wave Principle? You can continue to learn about expanded flats -- or review basic counting, understand the Fibonacci ratio, and more: when you purchase our foundational 10-DVD set today, you get a FREE seat for our live, online Q&A on June 21 with Senior Tutorial Instructor, Wayne Gorman. Here you will be able to "raise your hand" and ask an experienced mentor YOUR questions so you get the most out of this learning experience.

Limited Time Offer: Get EWI's acclaimed 10-volume Elliott Wave Educational Video Series with on-demand access to 4 valuable online courses and a FREE virtual seat to the LIVE Q&A session with Wayne Gorman!

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Tags: Elliott Wave Education, Elliott Wave Principle, Traders, trading lessons, Wayne Gorman

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