Subscribe to RSS feeds Bulkowski Blog via RSS

Thomas Bulkowski’s successful investment activities allowed him to retire at age 36. He is an internationally known author and trader with 30+ years of stock market experience and widely regarded as a leading expert on chart patterns. He may be reached at

Support this site! Clicking the links (below) takes you to Amazon.com. If you buy ANYTHING, they pay for the referral.

Picture of Bumper.
Kindle
Paperback
Nook
Picture of the head's law.
Kindle
Paperback
Nook
Chart Patterns: After the Buy
Getting Started in Chart Patterns, Second Edition book.
Trading Basics: Evolution of a Trader book.
Fundamental Analysis and Position Trading: Evolution of a Trader book.
Swing and Day Trading: Evolution of a Trader book.
Visual Guide to Chart Patterns book.
Encyclopedia of Chart Patterns 2nd Edition book.

Bulkowski's Flat Elliott Wave

Class Elliott Wave Fundamentals Psychology Quiz Research Setups Software Tutorials More...
Busted
Patterns
Candles Chart
Patterns
Event
Patterns
Small Patterns
Market
Industrials (^DJI):
Transports (^DJT):
Utilities (^DJU):
Nasdaq (^IXIC):
S&P500 (^GSPC):
As of 12/11/2017
24,386 56.87 0.2%
10,371 -31.68 -0.3%
763 4.90 0.6%
6,875 35.00 0.5%
2,660 8.49 0.3%
YTD
23.4%
14.7%
15.6%
27.7%
18.8%
Tom's Targets    Overview: 11/30/2017
24,600 or 23,500 by 12/15/2017
9,900 or 10,500 by 12/15/2017
800 or 750 by 12/15/2017
7,100 or 6,700 by 12/15/2017
2,725 or 2,575 by 12/15/2017

Written by and copyright © 2005-2017 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information.

This page describes the flat corrective wave of the Elliott wave principle, how price moves not in a straight line but in a series of rises and retracements.

 

The flat wave correction. Flats come in three types, regular, expanded, and running. This page concerns itself with the regular, 3-3-5 flat wave. The chart to the right shows a flat, a variety of the ABC corrective wave that follows a motive wave in a bull market.

Wave B stops near the start of wave A, and wave C stops near the end of wave A, buy many times terminating just beyond the end of wave A. Stopping close to the end of wave A distinguishes it from the zigzag wave.

 

 

The flat wave correction with subwaves. The chart to the right has the same general shape as the preceding chart but with more detail. It shows the subwaves within the flat correction. The red numbers 1-5 describe the line segments or subwaves within the ABC correction. Wave A is composed of three subwaves as is wave B, but wave C has five subwaves. That's where the flat 3-3-5 term comes from. A flat is a term used for any ABC correction that has 3-3-5 subwaves.

 

The flat wave correction with subwaves in a bear market. This chart shows the same flat 3-3-5 corrective wave but in a bear market. Waves A and B are threes and wave C is a five. Wave B ends near where wave A starts and wave C ends near or slightly beyond where wave A ends.

A flat tends to occur when the overall trend is strong, so it almost always precedes or follows an extension. The more powerful the overall trend, the quicker the flat tends to occur. A flat 3-3-5 wave corrects less of the prior motive wave than does a zigzag pattern. Within a motive wave, the fourth wave tends to house a flat but wave two rarely does.

 

Flat Elliott Wave Rules

The three wave corrective phase has rules that govern its shape. They are listed here.

  • Corrective waves can head up or down.
  • The corrective phase aligns against the trend of one higher degree (a counter trend move).
  • Wave B terminates near the start of wave A.
  • Wave C terminates near the end of wave A, often slightly beyond the end.
  • Wave C does not go much beyond the end of A or the wave is a zigzag.
  • Look for a flat to precede or follow a wave extension.
  • The more powerful the existing trend, the shorter the flat tends to be.
  • You tend to see flats in wave four and not wave two of a motive wave.

-- Thomas Bulkowski

Top 

See Also

Written by and copyright © 2005-2017 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information. Signs you have a drinking problem: Sincerely believe alcohol to be the elusive 5th food group.