Corrective Waves

Question 1

What is the main purpose of corrective waves in Elliott Wave Theory?

Answer 1

To correct and reverse the primary 5-wave trend.

Question 2

How many waves typically make up a corrective pattern?

Answer 2

Three waves (known as a 3-wave countertrend).

Question 3

What labeling system is used for corrective waves instead of numbers?

Answer 3

Letters (A, B, and C).

Question 4

True or False: Corrective wave patterns only occur in bull markets.

Answer 4

False; they occur in both bull and bear markets.

Question 5

How many total corrective ABC patterns did Elliott identify?

Answer 5

21 patterns, ranging from simple to complex.

Question 6

What are the three simple main formations that make up all 21 corrective patterns?

Answer 6

Zig-zags, Flats, and Triangles.

Question 7

Describe the ‘Zig-Zag’ formation.

Answer 7

Steep price moves that go sharply against the predominant trend.

Question 8

In a Zig-Zag formation, which wave is typically the shortest?

Answer 8

Wave B.

Question 9

What defines a ‘Flat’ formation?

Answer 9

Simple sideways corrective waves where lengths are generally equal.

Question 10

What characterizes a ‘Triangle’ formation?

Answer 10

Sideways 5-wave patterns bound by converging or diverging trend lines.

Question 11

What are the four types of Triangle formations mentioned?

Answer 11

Symmetrical, descending, ascending, and expanding.