Trader: Zigzag

Elliott Wave.009-001

Zigzags are the most comment wave in the market. They’re in 3 waves overall (ABC), but the A wave and the C wave will be in 5 waves each. Much of the time, the A and C wave are equal in length, but the other common ratio is for the C wave to be 1.618 X the length of the A wave.

Rules (these are “hard” rules; they cannot be broken)

  • A zigzag always subdivides into three waves.
  • Wave A always subdivides into an impulse wave.
  • Wave C always subdivides into an impulse or diagonal triangle.
  • Wave B always subdivides into a zigzag, flat, triangle or combination.
  • Wave B never moves beyond the start of wave A.

Guidelines (guidelines can be broken but it’s rare that they are)

  • Wave A almost always subdivides into an impulse.
  • Wave C almost always subdivides into an impulse.
  • Wave C is often about the same length as wave A.
  • Wave C almost always ends beyond the end of wave A.
  • Wave B typically retraces 38 to 79 percent of wave A.
  • If wave B is a running triangle, it will typically retrace between 10 and 40 percent of wave A.
  • If wave B is a zigzag, it will typically retrace 50 to 79 percent of wave A.
  • If wave B is a triangle, it will typically retrace 38 to 50 percent of wave A.
  • A line connecting the ends of waves A and C is often parallel to a line connecting the end of wave B and the start of wave A. (Forecasting guideline: Wave C often ends upon reaching a line drawn from the end of wave A that is parallel to a line connecting the start of wave A and the end of wave B.)