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.
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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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