Key guidelines for identifying and measuring flat corrections: wave B retracement ranges, wave C target ratios, and the meaning of an oversized wave C.
Description
Flats follow several important guidelines for identification and price targeting. The most practically important is the wave B retracement — its extent determines which type of flat is forming.
Key Points
- Regular flat: wave B retraces 90%–100% of wave A
- Expanded flat: wave B retraces more than 100% of wave A (exceeds wave A start)
- Running flat: wave B > 100% of wave A, but wave C < 100% of wave A
- Wave C target (regular flat): 100% of wave A from wave B end
- Wave C target (expanded flat): 1.236× or 1.382× of wave A (from wave B end); extreme: 1.618× or 2.618×
- Oversized wave C: an extremely long wave C in an expanded flat is a sign of a powerful trend in the corrective direction — reconsider whether the larger pattern is a flat or an impulse
