Elliott Wave Structures Explained

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 Standard Impulse Structure

• Waves 1, 3, and 5 move with the trend
• Waves 2 and 4 are corrective pullbacks
   

Core Rules:

• Wave 2 cannot retrace more than 100% of Wave 1
• Wave 3 cannot be the shortest impulse wave
• Wave 4 cannot overlap Wave 1

 A leading diagonal appears at the start of a new trend and signals early participation.

Characteristics:

• Overlapping waves - Wave 4 Can Overlap wave 1 in this case.
• Weaker momentum
• Often forms in Wave 1 or Wave A of a correction.
• This wave can be subdivided into threes or fives.

 An ending diagonal forms at the end of a trend and often precedes sharp reversals. 

Characteristics:

• Loss of momentum
• Overlapping structure
• Appears in Wave 5 or Wave C
• This wave is subdivided into threes

 A zigzag is a sharp correction that moves strongly against the prior trend.

Structure:

Characteristics:

• Wave A: 5-wave impulsive move
• Wave B: 3-wave corrective retracement
• Wave C: 5-wave impulsive move

This creates a 5–3–5 internal structure. 

• Strong movement against the prior trend
• Wave B is typically shallow
• Wave C often equals or exceeds Wave A
• Clear directional slope (not sideways)
• Appears most often in Wave 2 or Wave B positions
   

Zigzags reflect aggressive countertrend psychology, where traders rapidly unwind positions.

 Flats move sideways and represent consolidation, not strong reversal.

Characteristics:

• A, B, and C waves are similar in size
• B wave often retraces most or all of Wave A
• Wave A is subdivided into three waves
• Wave B is also subdivided into three waves 
• Wave C is a strong five wave impulsive wave
• Wave C usually described by the market as a crash and usually corrects violently

 An expanded flat occurs when:

Characteristics:

• Wave B exceeds the start of Wave A
• Like a flat, Wave A is subdivided into three waves
• Wave B is also subdivided into three waves
• Wave C is a strong five wave impulsive wave

Wave C usually corrects violently
 

These patterns often trap traders expecting trend continuation.

 A running flat is a variation of the flat correction that occurs in very strong trending markets. Unlike regular or expanded flats, a running flat fails to retrace fully and instead resolves with trend continuation.

Running flats often confuse traders because price appears corrective, yet never gives the expected pullback.

• Wave A = corrective
• Wave B = exceeds or retraces most of Wave A
• Wave C = fails to move beyond the end of Wave A and truncates

Characteristics:

• Occurs in strong trends
• Subdivides like a regular flat or expanded flat (3-3-5)
• Wave B moves beyond the start of Wave A
• Wave C is truncated and does not exceed Wave A
• Indicates underlying trend strength
• Often followed by a powerful impulsive move
   

 Triangles represent compression and indecision and usually appear before the final move of a trend.

Triangles come in several forms:

• Contracting triangles (most common)
• Expanding triangles (rare)
• Ascending triangles
• Descending triangles
   

Despite shape differences, the internal structure and rules remain the same.

Characteristics:

• Five overlapping waves (A–B–C–D–E)
• Declining volatility
• Each wave must subdivide correctively in three waves (3-3-3-3-3)
• Wave C cannot be the shortest wave
• Wave E often falls short of the trendline
• Triangles never appear in Wave 2 positions
• Triangles typically appear in: Wave 4
  and Wave B
• Usually a final wave before trend continuation

A W–X–Y correction is a combination of two corrective patterns joined by an intervening wave labeled X.

• W = first corrective structure (zigzag, flat, or triangle)
• X = connector wave (corrective, not impulsive) must be three waves
• Y = second corrective structure (zigzag, flat, or triangle)

Characteristics:

• Sideways price action
• Overlapping waves
• Extended consolidation
• Often replaces a simple A–B–C when time correction is needed
• Each corrective segment (W and Y) must be a valid correction on its own
• The X wave cannot be impulsive
• Momentum typically increases as the structure progresses

 A W–X–Y–X–Z correction is an extension of the W–X–Y pattern, linking three corrective structures instead of two.

This pattern forms when the market requires even more time, not distance, to resolve.

Structure:

• W = first corrective structure (zigzag, flat, or triangle)
• X = first connector wave (corrective, not impulsive) must be three waves
• Y = second corrective structure (zigzag, flat, or triangle)
• X = second connector wave (corrective, not impulsive) must be three waves
• Z = third corrective structure (zigzag, flat, or triangle)

Characteristics: 

• Extremely overlapping price action
• Long duration relative to price movement
• Often mistaken for trendless or random markets
• Frequently precedes a strong impulsive move once complete