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Chapter 4 — Origins and Applications of the Fibonacci Sequence
Figure 34
Flat corrections subdivide as 3-3-5; waves A and B consist of three waves, and wave C, as always, is made up
of five. Within a normal flat correction, each wave tends toward equality. Wave B will end at or near the origin
of wave A, and wave C will finish just below the extreme of wave A. In addition to waves A and C tending
toward equality, I often find that wave C will equal a 1.382 multiple of wave A (Figure 34). An expanded flat
correction subdivides just like a normal
or regular flat, except that wave B exceeds
the origin of wave A. In this case,
wave C will equal either a 1.618 multiple
of wave A or a .618 multiple of wave A
extended from the extreme of wave A
(see Figure 35).
Because of the unique way that triangles
unfold, you should use Fibonacci retracements,
rather than projections, to
evaluate price targets for triangle corrections.
Typically, alternating waves
within a triangle will adhere to a .618 or
.786 relationship. For example, waves
E, D and C will equal approximately a
.618 relationship of waves C, B and A,
respectively.
Figure 35
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