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In Elliott Wave theory, a flat is a pattern consisting of three waves labeled A-B-C. It is a corrective pattern that runs counter trend. The pattern tends to be a shallow retracement of the previous trend and may be the ‘flag’ of the common flag pattern at times. At other times, it may look like a simple range that spends more time going sideways than making any real progress in price.
In an impulse, flats are typically found in the 4th wave position. Flats can make up the ‘A’ or the ‘B’ wave of another corrective pattern, but you won’t find them in the ‘C’ wave of a correction.
There are essentially 3 types of flat corrections. The regular flat, the expanded flat, and the running flat. The name of the pattern you are identifying isn’t as important as what the pattern implies. In each of the flats above, the implication is a sideways consolidation that eventually would resolve as a complete retracement of the pattern and continuation of the trend prior to entering the flat pattern.
In an impulse, flats are typically found in the 4th wave position. Flats can make up the ‘A’ or the ‘B’ wave of another corrective pattern, but you won’t find them in the ‘C’ wave of a correction.
There are essentially 3 types of flat corrections. The regular flat, the expanded flat, and the running flat. The name of the pattern you are identifying isn’t as important as what the pattern implies. In each of the flats above, the implication is a sideways consolidation that eventually would resolve as a complete retracement of the pattern and continuation of the trend prior to entering the flat pattern.
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