Similar to ABCs, WXY and WXYXZ corrections (also known as complex corrections) run counter trend to the impulse waves that it is retracing. All corrections should be more controlled than the more forceful impulse waves they are retracing. Learning these different patterns will help identify opportunity to enter and exits the market to ensure that you are making profitable trades.
WXY corrections have three waves to them—similar to the zigzag and ABC patterns—with the main different being that they begin and end with three waves. In addition, each of the legs will consist of either zigzag or ABC patterns themselves.
WXY corrections follow the same rules as flats, which means that they can take on the characteristics of regular, running, and expanded flats. WXY’s can be one of the trickiest to identify, which is why we have a lesson specifically dedicated to these structures in the New Wave Academy
These structure are relatively rare compared to the WXY structures. Often, what some think is a WXYXZ is really another pattern in disguise, but they do exists. WXYXZ are patterns that have five wave to them, but they differ from impulse waves in that they have 3 wave in each leg, instead of the 5-3-5-3-5 pattern, and they often move in a channel.
You will need a sharp eye to spot these patterns, but once you begin to master corrections, you will understand how to recognize and trade these complex structures.