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Advanced Elliott Wave Corrections

Learn To Trade Class #2 Plan Your Trade, Trade Your Plan. Advanced Elliott Wave Corrections. Today we’ll identify the different properties of Elliott Wave corrections & how to trade them. We will begin at 7:00PM ET – You will hear no sound until we start. Basic 5-Wave Pattern. 5. 3.

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Advanced Elliott Wave Corrections

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  1. Learn To Trade Class #2 Plan Your Trade, Trade Your Plan Advanced Elliott Wave Corrections Today we’ll identify the different properties of Elliott Wave corrections & how to trade them. We will begin at 7:00PM ET – You will hear no sound until we start

  2. Basic 5-Wave Pattern 5 3 Wave 5 Wave 4 Wave 3 1 4 Wave 2 Wave 1 2

  3. Motive Wave Tip If you incorrectly label a motive wave, MotiveWave will popup an alert Motive Waves

  4. Motive Wave Tip Right click on the dotted line of waves 1, 3, 5, A and C andMotiveWaveknows you are working with a motive and will only give you the option of “impulse” Motive Waves

  5. Motive vs. Corrective Motive Corrective

  6. Corrective Wave Variations Corrective waves work counter to the trend of one large degree, often with hesitant, choppy price action. Most often, corrective waves are 3-waves, but never 5-waves, and are difficult to label in real time and trade.

  7. 3 Wave A-B-C Corrective Pattern B Wave A Wave B Wave C A C

  8. Complete 8 Wave Pattern 5 Wave A – Investors remain bullish, convinced of an easy buying opportunity. B 3 Wave 5 Wave A Wave 4 Wave B Wave C 1 4 Wave 3 A Wave B – Bullish investors are convinced the market is moving to new highs. Wave 2 C Wave 1 Wave C – Investors highly discouraged, stops below Wave B lows are triggered. 2

  9. Motive Wave Tip Ctrl + Shift I to use motive wave tool Label The Corrective Waves

  10. Motive Wave Tip Ctrl + Shift K To use corrective wave tool Label The Corrective Waves

  11. Corrective waves posses a 3-Wave (ABC) structure that retraces a % of a prior move Corrective waves trend in the opposite direction as the wave of 1 larger degree. b a Labeled with letters. c Waves 2 – 4 – B are corrective waves. 2 – 4 - B Corrective Waves

  12. 5 3 B 1 4 A C 2 Corrective Waves Uptrend Downtrend

  13. Motive Wave Tip Right click on the dotted line of wave 2, 4, B and MotiveWave knows you are working with a correction and will only give you the option of “correction” Corrective Waves

  14. B A C Zig-Zag Variations ofCorrective Waves

  15. B ii Zig-Zags posses a 3-Wave (ABC) structure iv a ii i 2. Subdivides into a 5-3-5 b iii 3. Often found in W.2 or W.B i iv v B-wave retraces less than 78.6% of A The end of W.C is considerably lower than the start of W.A A iii Zig-Zag Corrections v C (2) or (B)

  16. Wave A is often equal to Wave C in terms of price distance traveled Zig-Zag Corrections

  17. Zig-Zag Corrections

  18. B C A D E Triangle Variations ofCorrective Waves

  19. (3) or (A) (5) or (C) Reflects balance of forces B D Occurs prior to a final motive wave in the pattern of one larger degree, terminal move E 5 waves, all with 3-wave subdivisions, labeled A-B-C-D-E C (4) or (B) A Must retrace portion of the prior impulse wave at W.E’s end Triangle Corrections

  20. B (5) or (C) (3) or (A) W.B exceeds W.A’s beginning D Advance to new high in W.B often ‘fakes’ traders out E C (4) or (B) Very common variation A Running Triangles

  21. Running Triangles

  22. Running Triangles

  23. Symmetrical Triangles

  24. (B) (D) (A) (C) (E) (E) (C) (B) (D) (A) Reflects a bullish (ascending) or bearish (descending) bias Ascending triangles maintain consistent highs Descending triangles maintain consistent lows Ascending / Descending

  25. (D) (B) (A) (C) (E) Extremely rare Always in a 3-3-3-3-3 substructure No variations, depicted as shown Reverse Symmetrical

  26. Beware the Triangle-B Trap

  27. Beware the Triangle-B Trap

  28. Beware the Triangle-B Trap

  29. B A C Flat Variations ofCorrective Waves

  30. B c b ii a i iv b a c iii v A C (4) 3-wave pattern labeled A-B-C (3) Subdivides 3-3-5 Often occurs in W.4 Unlike Zig-Zags, the end of W.C terminates just prior, at, or beyond the end of W.A. B-wave should retrace at least 90% of A Occurs in strongly trending markets, around an extension Flat Corrections

  31. B (3) c W.B ends beyond W.A’s beginning b ii a W.C ends beyond W.A’end i b Very common variation a iv Same composition as a regular flat wave c A iii v C (4) Expanded Flat Corrections

  32. B c W.B ends beyond W.A’s beginning b ii a iv W.C ends short of W.A’s end i b a Larger trend powerful, does not allow for re-test of W.C low iii v c C A (4) Occurs infrequently Running Flat Corrections

  33. Motive Wave Tip If A-wave and B-wave of a correction unfold in 3-wave structures, then a “flat” or “triangle” are both possible. If C-wave unfolds in a 3-wave structure then it’s a “triangle” and the correction is incompelte. If C-wave unfolds in a 5-wave then a “Flat” and the correction is complete. Critical Thinking

  34. Critical Thinking

  35. Critical Thinking

  36. X Y W Combination Variations ofCorrective Waves

  37. B B ii ii c c iv iv a a (X) (X) ii ii B B i i ii ii c c b b iii iii i i iv iv a a iv iv ii ii i i v v A A b b iii iii iii iii i i iv iv v v v v C C A A iii iii (W) (W) C C (Y) (Y) Instead of an A-B-C pattern, combinations take on an W-X-Y pattern X X waves are typically a Zig-Zag pattern W & Y waves are either Zig-Zags, Flats or Triangles W Combinations typically have a side-ways appearance Y X-Wave Combinations

  38. B ii c iv a (X) ii B i ii c b iii i iv a iv ii i v A b iii iii i iv v v C A iii (W) C (Y) A Double Zig-Zag joined by a X wave which is also a Zig-Zag This would be a very deep correction compared to other combinations Double Zig-Zag Combo

  39. c c c ii b a a c b b b a a iv i b a a b a b a b c iii c c c v What combo is this?

  40. B ? B c c D c ii b a a c b b b a a iv i b a a b a b a b c iii c E c c C v A A C What combo is this?

  41. B (X) B c c D c ii b a a c b b b a a iv i b a a b a b a b c iii c E c c C v A A C What combo is this?

  42. B (X) B c c D c ii b a a c b b b a a iv i b a a b a b a b c iii c E c c C (Y) v A A C 4 (W) What combo is this?

  43. Flat Wave Triangle (X) (Y) (W) Flat Waves are common in the W wave position Triangles are common in the Y wave position This combination looks more sideways than directional Flat Triangle Combo

  44. c c ii ii b a a c ii iv a i iv i a b b i iii b iv iii c v v iii v What combo is this?

  45. B (X) c c ii B ii b a a c ii iv a i iv i a b b i iii b iv iii c A v v C A iii v C What combo is this?

  46. B (X) c c ii B ii b a a c ii iv a i iv i a b b i iii b iv iii c A v v C A iii v (W) C (Y) What combo is this?

  47. Flat Wave Zig-Zag (X) (W) (Y) Flat Zig-Zag Combo

  48. Zig-Zag Flat Triangle What’s this? (X) (X) (W) (Z) (Y) Triple combinations are three corrective patterns joined by two X waves. Labeled W-Y-Z (W-X-Y-X-Z). Rare.

  49. Zig-Zag Flat Triangle (X) (X) (W) (Z) (Y) Triple combinations are three corrective patterns joined by two X waves. Labeled W-Y-Z (W-X-Y-X-Z). Rare. Triple Combination

  50. Motive Wave Tip Decomposing Complex

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