Shown is the basic five wave motive phase (as opposed to the three wave corrective phase) of the Elliott wave principle. Price moves in a rise-retrace pattern that is similar to an incoming tide. Notice in the chart to the right that the impulse waves, 1, 3, and 5 travel farther than the corrective waves 2 and 4. This behavior leads to a rising price trend in this example.

Reference the figure to the left Three of the waves, 1, 3, and 5, move in the direction of the trend of one higher degree (the blue numbers 1 through 5). This is similar to an ocean’s tide. If you are looking at a ripple, one higher degree would be the wave. One higher degree from a wave would be the tide.

Counter trend moves 2 and 4 interrupt the movement of the main thrust.

The orientation of the basic 5 wave cycle need not be one of a rising price trend. The chart to the right shows a 5 wave pattern in a falling price trend. As described above, the 5 wave cycle obeys the direction of the trend of one higher degree. In the middle chart of the three on this page, each segment of the A wave is composed of 5 smaller segments, not 3 as in an ABC correction.

The five wave motive phase has rules that govern its shape. They are listed here.

• The motive phase is composed of five waves, three advancing (1, 3, 5) and two counter trend waves, 2 and 4.
• Motive waves can head up or down.
• The motive phase aligns with the trend of one higher degree.
• Wave 2 never moves beyond the start of wave 1.
• Wave 3 is never the shortest wave.
• Wave 4 never overlaps the end of wave 1.
• Waves 2 and 4 tend to alternate in form. If wave 2 is a zigzag, wave 4 will be a flat, for example.
• One of the waves, 1, 3, or 5, will often (but not always) be much longer (extended) than the other two.

Bulkowski’s Expanded Flat Elliott Wave.

Flats come in three varieties, regular, expanded, and running. This page concerns itself with the expanded flat. An expanded flat is more common than a regular flat. Elliott called an expanded flat an irregular flat. The chart to the right shows the basic configuration of an expanded flat in a bull market. Notice how wave B extends beyond the start of wave A, and wave C extends beyond the end of wave A.

The chart to the right has the same general shape as the preceding chart but with more detail. It shows the subwaves within the extended flat 3-3-5 correction. Thered 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 chart to the right has the same general shape as the preceding chart but with more detail. It shows the subwaves within the extended flat 3-3-5 correction. Thered 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.

This chart shows the same expanded flat 3-3-5 corrective wave but in a bear market (also called an inverted expanded flat). Waves A and B are threes and wave C is a five. Wave B ends beyond where wave A starts, and wave C ends well beyond where wave A ends.

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 beyond the start of wave A.
• Wave C terminates beyond the end of wave A.