EW-Only Elliott Wave Counter

Elliott Wave 1–5 and A–B–C: Explanation & Trading Guide
Prepared for: William Zysk


1. Overview
Elliott Wave Theory divides market movement into two major categories: Impulses (1–5) and Corrections (A–B–C). This guide explains each wave, what it represents, and how to trade them effectively using structure, confirmation, and risk control.
2. Impulse Waves (1–5)
Impulse waves are the trending, directional phases of market movement. They appear as a 5‑wave sequence in the direction of the dominant trend.
Wave 1: The start of a new trend. Usually forms after a reversal. Wave 1 is often not obvious until later.
Wave 2: A corrective pullback against Wave 1. Usually retraces 38.2–61.8% of Wave 1 but does NOT break its start.
Wave 3: Typically the strongest and longest wave. Must NOT be the shortest wave among 1, 3, and 5. Often extends 1.618× Wave 1.
Wave 4: A corrective wave after the power move of Wave 3. Usually shallow and may not overlap Wave 1 (unless diagonal).
Wave 5: Final push in the trend direction. Often fueled by late buyers. Can form divergences in momentum.
2.1 How to Trade Impulse Waves
• The safest trades typically come at Wave 2 and Wave 4, entering in the direction of the trend.
• Wave 2 entries: Look for a retracement to 38–61%. Stop below Wave 1 start.
• Wave 3 targets: Fib extensions such as 1.272, 1.618, or structure levels.
• Wave 4 entries: Enter after a shallow correction that respects Wave 1 territory unless diagonal.
• Wave 5 entries: Higher risk; look for divergence. Better for exits than entries.
3. Corrective Waves (A–B–C)
After an impulse completes (5 waves), markets correct in three waves labeled A, B, and C. This forms a counter‑trend movement.
Wave A: The first move against the completed 1–5 trend. Often a sharp reaction as the market takes profits.
Wave B: A counter‑move against Wave A. Often confuses traders by making it look like the trend might continue.
Wave C: Final leg of the correction. Usually a 5‑wave move and often equal to Wave A or larger.
3.1 How to Trade A–B–C Corrections
• Best trades generally occur at the END of Wave C, anticipating the resumption of the larger trend.
• Wave A trades: Fast but counter‑trend; use caution.
• Wave B trades: Often traps traders; avoid unless experienced.
• Wave C trades: Look for completion of a 5‑wave internal structure and a pivot break for confirmation.
• Stop placement: Always beyond the extreme of Wave C.
• Targets: Prior structure → origin of A → new impulse direction.
4. Practical Trading Playbooks
4.1 Bullish Trend Example (Impulse Up)
1. Identify Wave 1 up. Enter on Wave 2 pullback with stop under Wave 1.
2. Ride Wave 3. Scale partial profits at extensions.
3. Re-enter on Wave 4 if conditions are clean.
4. Exit majority at Wave 5. Prepare for A–B–C retracement.
4.2 Bullish Correction Example (A–B–C Down)
1. After a completed 5‑wave uptrend, wait for A down.
2. Let B retrace—do not trade it.
3. Map C’s internal 5 waves and wait for exhaustion.
4. Enter long on a pivot reclaim after C completes.
5. Stop below C; targets: B high → A start → trend continuation.
5. Common Mistakes & Tips
• Forcing a count where none exists.
• Trading Wave B (high risk).
• Mislabeling corrections as impulses.
• Entering before Wave C fully forms.
• Ignoring structure confirmation and pivot breaks.


Flats vs Expanded Flats (Elliott Wave) – How to Identify & Trade
Prepared for: William Zysk


1. Quick Definitions
Both Flats and Expanded Flats are Elliott Wave corrective structures with a 3–3–5 internal pattern (A–B–C). The key differences are the depth of Wave B and the size of Wave C.
1.1 Regular Flat
• Structure: A (3), B (3), C (5)
• Wave B retracement: typically 90–100% of Wave A (B returns close to A’s start).
• Wave C length: roughly equal to A (minor overshoot common).
• Market character: sideways correction; balanced participation; no major fake-out on B.
1.2 Expanded Flat
• Structure: A (3), B (3), C (5)
• Wave B retracement: exceeds 100% of A (B breaks beyond A’s origin).
• Wave C length: larger than A, commonly 1.236–1.618 × A.
• Market character: B is a false breakout/liquidity grab; C is a sharp reversal in the opposite direction.
1.3 Key Differences at a Glance
Feature Flat Expanded Flat
Wave B retracement 90–100% of A >100% of A (breaks A origin)
Wave C size ~= length of A Greater than A (≈1.236–1.618× A)
Market behavior Sideways/contained False breakout on B, strong reversal on C
2. Identification Checklist
For both patterns, confirm the 3–3–5 sequence (A–B–C) using confirmed swing pivots:
1. 1) A completes as a 3-wave move.
2. 2) B retraces against A as a 3-wave move.
3. 3) C advances as a 5-wave move to finish the correction.

Flat-specific:
• B does not convincingly exceed A’s start (≈90–100% retrace).
• C terminates near A’s end (equal or mild overshoot).

Expanded Flat-specific:
• B clearly exceeds A’s start (>100% of A).
• C extends beyond A’s end and is typically stronger/longer.
3. How to Trade Them
3.1 Core Principles
• Objective: Trade the end of C for resumption of the prior trend (the move preceding A).
• Timing: Wait for C to complete its internal 5 waves and for price confirmation (e.g., pivot break or channel break).
• Risk: Place invalidation beyond the termination of C (where your count fails).
3.2 Trading a Regular Flat
Scenario (bullish context example): Prior uptrend → A down → B up (near A start) → C down ≈ A.
Entry ideas:
• Conservative: Wait for a confirmed swing low after C completes (higher low or break above a minor pivot).
• Channel-based: Draw a corrective channel around A–B–C; enter on a break back above the channel (for bullish resumption).
Stops & invalidation:
• Place the stop just beyond C’s termination. If price exceeds it, the flat likely isn’t finished or the count is wrong.
Targets:
• T1: Prior structure pivot inside the correction (midpoint).
• T2: Origin of the correction (start of A).
• T3: Measured move to resume trend (next impulse objectives if context supports it).
3.3 Trading an Expanded Flat
Scenario (bullish context example): Prior uptrend → A down → B up (breaks above A origin) → C down > A.
Entry ideas:
• Fade the trap: After B’s fake breakout, wait for the 5-wave C to complete; enter on a reversal trigger (pivot reclaim or channel break).
• Fibonacci confluence: Look for C ≈ 1.236–1.618 × A. Combine with a local 5-wave completion in C for timing.
Stops & invalidation:
• Place stop just beyond C’s termination. Expanded flats are volatile; give the setup room consistent with timeframe ATR.
Targets:
• T1: Reclaim of B’s swing (the breakout level).
• T2: Start of A (full correction retrace).
• T3: Next impulse projection in the direction of the larger trend.
4. Execution Playbooks (Bullish & Bearish)
Bullish pattern (correction against an uptrend):
4. 1) Confirm 3–3–5 down as ABC. B breaks A origin only in expanded flats.
5. 2) Map C’s internal 5 waves; watch for termination near equality with A (flat) or 1.236–1.618× A (expanded flat).
6. 3) Trigger: break of a minor pivot high or corrective channel; enter long.
7. 4) Stop: just beyond C’s low. Targets: previous pivots → A start → trend continuation.
Bearish pattern (correction against a downtrend):
8. 1) Confirm 3–3–5 up as ABC. B breaks A origin only in expanded flats.
9. 2) Map C’s internal 5 waves; watch termination near equality with A (flat) or 1.236–1.618× A (expanded flat).
10. 3) Trigger: break of a minor pivot low or corrective channel; enter short.
11. 4) Stop: just beyond C’s high. Targets: previous pivots → A start → trend continuation.
5. Risk Management & Common Mistakes
• Size positions so that a stop beyond C’s end risks a fixed fraction of equity (e.g., 0.5–1% per trade).
• Do not front-run C’s end without evidence of 5 subwaves completing; expanded flats especially can stretch further.
• If your B never reached ~90% of A (flat) or never exceeded A origin (expanded), consider misclassification or another correction type.
• Conditions with extreme news/volatility can distort typical ratios—require stronger confirmation.
6. Using the EW-Only Indicator With These Patterns
• The indicator labels ABC and attempts to classify Zigzag / Flat / Expanded Flat using pivot-only logic and Fibonacci guidelines.
• For Flats: you should see B near A’s start and C near A’s end; annotations show B retrace and C multiple.
• For Expanded Flats: expect a labeled B beyond A origin and a larger C (annotation often ~1.236–1.618× A).
• Consider enabling stricter Fibonacci checks (fibStrict=true) when you want higher-confluence patterns.