Elliott Wave Analysis Can Help You See Countertrends. Pattern in Focus: the Zigzag.

Often, as traders and investors we start off with an open mind about playing the field, so to speak. We watch the news, listen to friends and colleagues — and we try to apply what’s known as “fundamental” market analysis to make our trading decisions. Soon, though, we start to realize that the “bullet-proof” logic of “fundamental” analysis is not Kevlar, but a piece of cardboard. We see markets fall after good news; rally after bad; and go sideways, defying both bulls and bears. That’s when we realize that trading is not as easy as it seems.

The Basics of Corrective Waves

The first distinction in Elliott Wave Analysis is between “motive” and “corrective” waves. The primary focus of this lesson is the corrective waves. Corrective waves can be either “ZigZag”, “Flat” or “Triangle”.