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The Zig Zag

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Very easy pattern to spot and one pattern i do like trading if i can spot it, the good thing about Elliott is that when you have enough experience from screen time and watching patterns morph, you can take that to any market and do as i do and scan perhaps 20-30 markets a weekend and if you don't see something that is obvious within a few minutes you just move on to the next market, if you scan a few markets there will generally be some patterns that are near to or looking like good setups and can be put on a watch list

Generally found in the wave 2 position although also found in part of combinations moves thats are made up of various moves, however i am showing an easy interpretation to watch for

So a 5-3-5 pattern, wave [a] is 5 waves [b] is 3 waves wave [c] is 5 waves

Wave [b] can never retrace all of wave [a], thats invalidates the pattern, wave [b] must remain above or below (depending on the direction) the origin of wave [a]

After an initial 5 waves up if you suspect only a correction then you would be looking for wave [b] in 3 waves towards the 50% or 61.8% retracement area is about the ideal place for a reversal so you would have that area targeted and then watch for corrective chop depending on the direction

Therefore setting up wave [c], and thus the 1x1 measurement in what Elliotticians look for as a target, its not always as simple as an exact target of [c] = [a] but its a very common target, so you can also count 5 waves for wave [c] and that coupled with a potential 1x1 area a target, but say you have 5 waves prior to what you suspect is a zig zag, so you would also have fibbo resistance and the previous 4th wave as targets are well

Thus giving you a target area for resistance as a reversal area

Where Zigzags look wrong is when the suspected wave [c] starts to look too aggressive and starts looking like a 3rd waves

The RSI is a good indicator to use as wave [c] generally is weaker than wave [a] as its nearing the end to a correction so will be lacking strength thats a good clue, also a 3rd wave will tend to have a gap up and run as part of the middle "3rd of 3rd", and aggressive price action which is something far different to what you are expecting at the end of a trend

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