ABC patterns are one of several corrections that we see in Elliott Wave, and it can be one of the most difficult patterns to trade. It is a 3-wave structure that can form in a few different ways including zigzags, regular flats, expanded flats, and running flats—each with their own characteristics and guidelines. Mastering corrections is a critical part of becoming a successful trader!
The zigzag is the first of the four ABC patterns. Like all ABC structures, there are three waves, but it differs from the rest by having a 5-wave pattern in the A and C legs, essentially forming a 5-3-5 wave structure. Zig Zags can resemble the beginning of an impulse wave, so recognizing the patterns and preparing for the corrections will help you gain and retain your profits.
Flats are similar to a zigzag pattern, but they have a key difference: The first leg consists of 3 waves instead of five, which makes the pattern a 3-3-5 structure instead of beginning and ending with five waves. Flats are considered connectors—meaning that if the trend is up or down, a flat will connect another leg that continues the trend.
A regular flat has the 3-3-5 structure of flats where the B wave does not extend beyond the beginning of the A wave. The C wave will often extend to the top of the A wave or just beyond.
Running flats also have the 3-3-5 structure of the regular flat, but the difference is that the B wave extends below the start of the A wave. The C wave also comes short of the end of the A wave and is often equal to the size of the A wave. This forms a running flat, which creates more bullish sentiment if the trend is up or bearish sentiment if the trend is down.
Similar to the running flat, the expanded flat has the 3-3-5 pattern and the B wave also extends beyond the beginning of the A wave. The main difference is that the C wave extends beyond the start of the A wave and forms the longest leg in the pattern.
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