Elliott Wave Pro
- Latest analyses
- Markets
- Elliott Wave Pro
- Stocks
- Indices
- Other instruments
- Crude Oil
- Videos
- Forex
- Invest
- Learn
- EW Video course
- Elliott Wave Theory
- EW Guide eBook
- History lessons
- eBooks
- Infographics
- Trading Basics
Home » The Mischievous Running Flat Correction
Elliott Wave Theory
SHARE
In “Expanding Flat and How to Avoid Its Traps” we examined probably the most common type of flat correction the markets could offer. It is easy to spot and relatively easy to trade. However, if you are constantly expecting the expanding variety, you are not going to be prepared for its exotic, but deceptive cousin – the running flat. An idealized example of its structure is given below.
Just as the expanding flat, the running flat has a three-wave structure, labeled A-B-C. Waves A and B consist of three waves. Wave B travels to a new extreme, exceeding the starting point of wave A of the pattern. And here comes the major difference between the two flat corrections. In an expanding flat, wave C travels beyond the starting point of wave B. Within the running type, it does not. In other words, a running flat wave C is not going to reach the termination point of wave A. When wave C is over, the entire corrective pattern ends and the larger trend resumes. Okay, enough theory, let’s take a look at a real example in GBPUSD.
On the above-shown chart, there is a running flat in the position of wave (B) of a larger (A)-(B)-(C) zig-zag. Wave (A) is a five-wave impulse, indicating that the trend is pointing north. But our focus is on wave (B). As soon as wave (A) ended, the exchange rate declined in three waves, labeled a-b-c for wave A. Wave A was followed by another three-wave sequence – a w-x-y double zig-zag to a new top in wave B. But the bears were not done yet. As soon as wave B came to an end, a five-wave sell-off in wave C occurred. But pay attention to its extend. The selling pressure was not strong enough to exceed the bottom of wave A. The bears ran out of power slightly above it, which is the only difference between expanding and running flats. The entire running flat correction ended with an ending diagonal in wave 5 of C of (B). After that, the uptrend resumed in wave (C) to the upside.
As previously mentioned, the running flat is probably the rarest pattern within the Elliott Wave Principle‘s catalogue. This makes it the most mischievous one as well, because you know it could happen, but you should never rely on that in trading.
CURRENCIES dollar ELLIOTT WAVE PRINCIPLE ELLIOTT WAVE THEORY FOREIGN EXCHANGE FOREX RATES FOREX TRADING FOREX TRADING STRATEGIES GBP GBPUSD INTRADAY TIPS INTRADAY TRADING INTRADAY TRADING TIPS INVESTING MARKET pound POUND TO DOLLAR TECHNICAL ANALYSIS TRADING USD
You may also like:
See all anaylses
Does The Elliott Wave Theory Work In Practice?
Education Elliott Wave Theory 01 Oct 23
Have you been in a situation where you’ve put in weeks and months of effort to study a trading strategy, only to find out...
How to Approach a Trade With Trend Direction Unknown
Education Elliott Wave Theory 07 Sep 22
Everyone is an expert with the benefit of hindsight. It is easy to give a successful trade as an example of how things should...
How to Recognize a Leading Diagonal Pattern
Elliott Wave Theory 22 Sep 17
One of the first Elliott Wave patterns we devoted an entire lesson to was the ending diagonal. It is relatively easy to recognize and...
See all analyses
You may also like:
Does The Elliott Wave Theory Work In Practice?
Education Elliott Wave Theory 01 Oct 23
Have you been in a situation where you’ve put in weeks and months of effort to study a trading...
How to Approach a Trade With Trend Direction Unknown
Education Elliott Wave Theory 07 Sep 22
Everyone is an expert with the benefit of hindsight. It is easy to give a successful trade as an...
How to Recognize a Leading Diagonal Pattern
Elliott Wave Theory 22 Sep 17
One of the first Elliott Wave patterns we devoted an entire lesson to was the ending diagonal. It is...
Elliott Wave: The Devil Is In the Details
Elliott Wave Theory 06 Jun 16
Probably thestrongest argument critics use against the Elliott Wave Principle is that traders could often come up with two...
Why Waiting For Confirmation? A Tale Of Greed
Elliott Wave Theory 20 May 15
Every trader with enough experience in the market usually comes to the conclusion, that he needs a system of...
What Is Fundamentally Wrong With Fundamentals?
Elliott Wave Theory 24 Feb 15
Can you guess which country has the best-performing global stock market so far in 2015? Germany? Japan? USA? Nope....
When Does an Elliott Wave Setup Fail?
Elliott Wave Theory 16 Jan 15
As a rule, you should never give up on a trade, if it still has the potential to develop...
See all analyses
New to Elliott Wave?
Elliott Wave principle offers a completely new understanding of what the nature of the markets is, what drives them and what can be derived from their movement. This course is for those of you, who have been looking for an honest Elliott Wave guide, describing the method’s advantages over other trading tools, but not hiding its weaknesses.
Check Video Course or Check our eBook
See our Video Course
or check our eBook
Last year over 60k readers trusted EWM Interactive to help them in their trading decisions.
I’m very happy i discovered your service. Thanks so much and keep up the good work!
- Xavier N.
Just loving your analysis. Thank you so much, really wished you add some more currencies to your list You have a client for life :)
- J. Kotzee
I love the way EWM does business: response times & overall friendly demeanor are fantastic... and the prices are very fair. The trade recommendations read like like they come from a seasoned trader that is used to winning. Couldn't ask for more.
- C. Montgomery
I love the way EWM does business: response times & overall friendly demeanor are fantastic... and the prices are very fair. The trade recommendations read like like they come from a seasoned trader that is used to winning. Couldn't ask for more.
- C. Montgomery
I’m very happy i discovered your service. Thanks so much and keep up the good work!
- C. Montgomery
Just loving your analysis. Thank you so much, really wished you add some more currencies to your list You have a client for life :)
- C. Montgomery
See more
Would you like free analyses?
Subscribe to our newsletter and receive free analyses as soon as we publish plus latest discounts and promotions directly to your inbox. Simply enter your email address below.
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it.Accept cookies
Popular searches: BitcoinCryptoEURUSDForexCrude Oil
All Markets
- Crude Oil
- Forex
- Indices
- Stocks
- Other Instruments
- All Analyses