# Elliott Wave — Corrections: Zigzags *Moving from the motive phase to the corrective phase. Corrections are where Elliott Wave gets hard — 80% of the difficulty. Zigzags are the first and most common corrective pattern.* --- ## The Corrective Phase — Overview The complete Elliott Wave cycle is 8 waves: five motive (1-2-3-4-5) + three corrective (A-B-C). Everything covered so far — impulses, extensions, diagonals — was the motive phase. Now we unpack how markets correct. ### Critical Misconception: Waves A and C Are Impulse Waves Most people don't realise that **waves A and C are impulse waves.** They must subdivide into five waves and follow ALL the same rules as waves 1, 3, and 5 (wave 2 can't retrace past wave 1, wave 3 can't be shortest, wave 4 can't overlap wave 1 — unless it's a diagonal). They can also be extended or form diagonals. Only **waves 2, 4, and B** are corrective waves (moving against the prevailing trend). This is important because when price drops in five waves (not three), it's likely a wave A — not just a pullback. If it only drops in three waves, it's probably corrective within the trend. **Fives = impulse direction. Threes = corrective.** The one exception: leading diagonals can move in waves of three (3-3-3-3-3), which can look corrective but are actually motive. That's what makes them tricky in real time. --- ## Zigzag Correction (5-3-5) A zigzag is a sharp three-wave corrective pattern labelled A-B-C, structured as **five-three-five:** - **Wave A:** Five waves down (impulse or diagonal) — the initial drop - **Wave B:** Three waves up (any corrective structure — flat, triangle, zigzag, complex) — the counter-trend bounce - **Wave C:** Five waves down (impulse or diagonal) — the final leg that completes the correction If the structure isn't five-then-three-then-five, it's not a zigzag. ### Key Characteristics - Zigzags are the **sharpest** type of correction — quick, decisive moves - Most common corrective pattern and the easiest to identify and trade - Wave C is typically **at least as large as wave A**, often extends to 1.618 or beyond - Waves A and C can contain extensions and can form as diagonals (ending diagonals on wave C are common) --- ## Fibonacci Targets for Wave C Use the **trend-based Fib extension tool:** click from the start of wave A → end of wave A → end of wave B → project forward. | Ratio | Description | Frequency | |---|---|---| | **1:1** | Wave C equals wave A in length — "partner leg" | Most common | | **1.272** | Slight extension beyond wave A | Common | | **1.618** | Wave C = 1.618 × wave A — stronger correction (golden ratio) | Very common | | **0.618** | Wave C shorter than wave A — more common when wave B is shallow (e.g. triangle) | Less common | | **2.0** | Significant extension | Uncommon | | **2.618** | Extreme extension — really powerful bear moves | Rare (tech bubble, major crashes) | **Rule of thumb:** Always check the 1:1 first, then the 1.618. These are your two primary targets. If wave B was a shallow correction (like a triangle), the 0.618 becomes more probable for wave C. ### Real Examples - **Bitcoin 2013-2015 bear market:** Wave C hit the 1.618 extension ($198 bottom) - **Bitcoin 2011 correction:** Wave C hit the 1:1 — equal to wave A - **Ethereum:** Three separate corrections all bottomed at the 1.618 — "Ethereum loves a 1.618" - **Apple GFC (2008):** Zigzag correction, wave C hit 1.618, with an ending diagonal forming the final leg of wave C - **Apple tech bubble:** Extreme bear market — wave C extended to the **2.618** with an ending diagonal at the bottom - **Bitcoin COVID correction:** Wave C hit the 1.272 --- ## ABC Personality — What Each Wave Feels Like Understanding the psychological character of each wave helps you confirm your wave count. If the sentiment doesn't match, your count might be wrong. ### Wave A — "It's Just a Pullback" - Fundamental news is still positive - Most analysts see it as a healthy correction in a still-active bull market - Market structure hasn't broken yet — technically could still be just another higher low - Volume increases on the drop, implied volatility rises - People who know charts start to exit, but the majority holds - **"Just a dip, buy it like the last one"** ### Wave B — "Told You So" - Prices reverse higher — seen as resumption of the bull trend - This is the **right shoulder** of a head & shoulders pattern in classical TA - Volume during wave B should be **lower than wave A** (weak bounce) - Fundamentals haven't turned negative yet but aren't improving - Everyone who held through wave A feels vindicated: **"See? I told you it was just a pullback, you idiot bears"** - This is the fake-out — people assume the trend will continue like it always has ### Wave C — "Oh No" - Prices drop **impulsively** in five waves — sharp and rapid - Volume picks up significantly - By wave 3 of wave C (the middle of the drop), almost everyone realises a bear market is entrenched - Fear enters the market — sentiment flips bearish - Wave C is typically at least as large as wave A, often extends to 1.618 or beyond - People who held through wave A and wave B are now so deep in losses they can't bring themselves to sell — they start wishing they'd sold on the first drop - **If you haven't got fear in the market yet, you're probably not in wave C** ### Matching Sentiment to Wave Count - Calling five waves up but no exuberance/euphoria? → You might not actually have five waves up - Calling a completed ABC but no fear? → The correction might not be done - Wave A can sometimes trigger extreme bearishness too (especially if wave A itself has an extended wave 5) — which then gets faded by the wave B bounce --- ## The Distinction: Corrective or Impulsive? The hardest question in real time: is this move corrective (ABC about to end) or impulsive (wave 1-2 of a new trend)? **After a zigzag completes:** You don't know if you're getting wave 3 in the same direction (it was just a correction within the trend) or if the ABC was the entire correction and the trend resumes. **How to tell:** - If price then moves in five waves beyond the correction → it's impulse, the trend is resuming - If price moves in three waves → it might be another corrective structure (W-X-Y, flat, etc.) - Wave 4 can't enter wave 1 territory — if it does, your impulse count is invalid - **This is why you always look to take profit in the zag zone** — because at the zag zone you don't know if it's wave 3 or wave C --- ## Zigzags in Both Directions **Bullish zigzag (in a bear market correction):** Five waves UP for A, three waves DOWN for B, five waves UP for C — a sharp rally within a larger downtrend. **Bearish zigzag (after a bull market impulse):** Five waves DOWN for A, three waves UP for B, five waves DOWN for C — the standard correction after a five-wave advance. The structure, rules, and Fibonacci relationships are identical regardless of direction. --- ## What's Coming Next Zigzags are just the first type of correction. Still to come: - **Flats** (3-3-5 structure) — sideways corrections where wave B retraces most or all of wave A - **Triangles** (3-3-3-3-3) — converging patterns that appear in wave 4 or wave B - **Complex corrections** (W-X-Y, double/triple zigzags, combinations) — when simple corrections aren't enough Corrections are where multiple possible counts exist simultaneously. Even experienced Elliotticians run 4-5 different scenarios during corrections and narrow down as the pattern develops. Impulses = relatively easy. Corrections = years of practice.