📚 ELLIOTT WAVE ZIGZAGS: Complete Guide & Fib Relationships
Master the Most Common Corrective Pattern | Rules, Guidelines & Trading Applications
📖 What is a Zigzag?
A zigzag is one of the most common Elliott Wave corrective patterns. It consists of three waves (A-B-C) that move sharply AGAINST the larger trend, creating a distinctive “Z” shape on the chart. Zigzags are highly directional reversals with clear structure and reliable Fibonacci targets, making them essential for traders to identify and trade.
🔧 Zigzag Structure: A-B-C Breakdown
| Wave | Structure | Direction | Characteristic |
| Wave A | 5-wave impulse (or 3-wave) | Against trend | Sharp, decisive move down (or up) |
| Wave B | 3-wave correction (any type) | Against Wave A (bounce) | Retraces 50%-79.6% of Wave A |
| Wave C | 5-wave impulse | Same as Wave A | Sharp move, often extends 1.236-1.618 of Wave A |
Key Point: Zigzags are characterized by sharp, impulse-like moves in waves A and C, with a corrective bounce in Wave B. The pattern creates the distinctive “Z” shape.
⚙️ OFFICIAL ZIGZAG RULES (Elliott Wave)
RULE 1: Wave A Structure
✅ Wave A MUST be a 5-wave impulse (or 3-wave in rare cases)
✅ Wave A is ALWAYS in the direction OPPOSITE to the trend that preceded it
✅ Wave A cannot overlap Wave 4 of the preceding impulse
RULE 2: Wave B Structure & Retracement
✅ Wave B MUST be a 3-wave corrective structure (zigzag, flat, or triangle)
✅ Wave B retraces 50-79.6% of Wave A
❌ Wave B CANNOT retrace more than 100% of Wave A (if it does, it’s NOT a zigzag)
✅ Wave B commonly retraces 61.8% or 76.4% of Wave A
RULE 3: Wave C Structure & Extent
✅ Wave C MUST be a 5-wave impulse
✅ Wave C typically reaches 61.8-100% of Wave A
✅ Wave C can extend to 123.6% or 161.8% of Wave A (in aggressive zigzags)
✅ Wave C should NOT be significantly shorter than Wave A
RULE 4: Zigzag as Whole
✅ Zigzag is 7-swing structure (5+3+5 subdivision)
✅ Zigzag typically retraces 50-79.6% of the preceding impulse wave
✅ Zigzags occur in positions 2, 4, A, or B of larger structures
✅ Wave C of a zigzag often extends into Wave 1 of the next impulse (no overlap at Wave 4)
📊 Fibonacci Relationships in Zigzags
WAVE B Retracement of Wave A:
| Fib Level | Typical Range | Frequency | Notes |
| 50% | Shallow retrace | 20% | Less common, indicates strength |
| 61.8% | MOST COMMON | 60% | Golden ratio – target this first |
| 76.4% | Deeper retrace | 15% | Still valid zigzag |
| 79.6% | Maximum valid | 5% | At limit – deeper = not a zigzag |
WAVE C Extent Compared to Wave A:
| Fib Ratio | Wave C Size | Frequency | Trading Implication |
| 0.618 of A | Shorter C | 15% | Weak zigzag – trend resuming |
| 1.0 of A | EQUAL WAVES | 50% | Most balanced – primary target |
| 1.236 of A | Extended C | 25% | Aggressive downside – deep correction |
| 1.618 of A | Extreme C | 10% | Panic selling/buying – violent moves |
WHOLE ZIGZAG Retracement of Prior Impulse:
| Impulse Wave | Typical Zigzag Retrace | Notes |
| Wave 1 | 50-79.6% (as Wave 2) | Wave 2 zigzag after impulse |
| Wave 3 | 50-79.6% (as Wave 4) | Wave 4 often zigzag pattern |
| Wave 5 | 38.2-50% (as correction) | A-B-C zigzag in correction phase |
🎯 Types of Zigzags
1. STANDARD ZIGZAG (Most Common)
Structure: A (5 waves) → B (3 waves, 61.8% retrace) → C (5 waves, 100% of A)
Frequency: 50% of all zigzags
Trading: Most reliable, easy to trade
Example: XAUUSD Wave 2 pullback after impulse up
2. EXTENDED ZIGZAG (Aggressive)
Structure: A (5 waves) → B (3 waves, shallow) → C (extends 1.236-1.618 of A)
Frequency: 25% of zigzags
Trading: More profits but riskier – C extends beyond comfort
Indicator: Often after strong impulsive move – panic selling/buying
3. TRUNCATED ZIGZAG (Weak)
Structure: A (5 waves) → B (3 waves) → C (only 0.618 of A)
Frequency: 15% of zigzags
Trading: Weak signal – trend resuming quickly
Indicator: Market running out of correction energy
4. DOUBLE/TRIPLE ZIGZAG (Complex)
Structure: Zigzag (W) → Connector (X) → Zigzag (Y) [→ X → Z]
Frequency: 10% of zigzags
Trading: Complex but profitable – multiple entry points
Duration: Takes more time/bars to complete
💡 Trading Zigzag Patterns
SETUP #1: Anticipate Wave C From Wave B Low
After Wave B completes: Set buy orders at key Fib levels where Wave C would target (100% or 123.6% of Wave A below Wave B start)
| Wave B retrace: | 61.8% of A |
| Entry: | At Wave B low, with anticipation of C wave down |
| Target C: | 100% or 123.6% of Wave A extent |
| Risk: | Above Wave B high (invalidation) |
SETUP #2: Trade the Wave C Breakout
After Wave C completes: Expect trend resumption (Wave 1 of next impulse) ABOVE Wave A high
| Confirmation: | Close above Wave A high = zigzag complete |
| Entry: | BUY break above Wave A high + slight pullback |
| Target: | Wave 1 of new impulse (extends beyond Wave A) |
| Stop: | Below Wave C low (zigzag invalidation) |
SETUP #3: Wave B Bounce Trade
During Wave B formation: Trade the bounce from Wave A low to 61.8% retrace
| Entry: | At Wave A low (start of Wave B) |
| Target: | 61.8% of Wave A (Wave B expected high) |
| Stop: | Below Wave A low |
| Duration: | Quick 1-3 day trade (Wave B is fast) |
✅ Zigzag Identification Checklist
- ✓ Does Wave A have 5-wave subdivision (or 3-wave in rare cases)?
- ✓ Is Wave A moving AGAINST the larger trend?
- ✓ Does Wave B retrace 50-79.6% of Wave A? (61.8% most common)
- ✓ Is Wave B a 3-wave structure (ABC)?
- ✓ Does Wave C have 5-wave impulse structure?
- ✓ Is Wave C moving in same direction as Wave A?
- ✓ Does Wave C reach 61.8-161.8% of Wave A (typically 100%)?
- ✓ Does zigzag retrace 50-79.6% of prior impulse?
- ✓ After completion, does price break above Wave A high? (confirmation)
- ✓ No overlap violations between waves (Wave C doesn’t overlap Wave B start)
⚠️ Common Zigzag Mistakes to Avoid
❌ Mistake 1: Calling a Wave B retrace >79.6% a zigzag.
✓ Fix: If B retraces >79.6%, it’s likely a flat or other corrective structure, not a zigzag.
❌ Mistake 2: Forcing a 3-wave pattern into a zigzag.
✓ Fix: Wave A MUST have 5 waves (sharp, not gentle). If you see 3 waves, it’s NOT a zigzag.
❌ Mistake 3: Not waiting for Wave B completion before entering Wave C trade.
✓ Fix: Confirm Wave B retrace Fib level is hit before shorting into Wave C.
❌ Mistake 4: Assuming all Wave A’s are the same size.
✓ Fix: Wave C often extends 1.236-1.618x Wave A – don’t use Wave A size as only C target.
❌ Mistake 5: Missing zigzags because Wave B looks “too big.”
✓ Fix: Wave B can be 50-79.6% retrace – trust the math, not the eye.
📈 Real Example: XAUUSD Zigzag
Scenario: Gold completes Wave 5 of impulse at 4,800, then enters Wave 2 correction.
| Wave | Structure | Price Level | Fib Notes |
| Wave A Down | 5-wave impulse | 4,800 → 4,500 (300 pips) | Sharp down |
| Wave B Up | 3-wave bounce (ZigZag) | 4,500 → 4,685 (185 pips) | 61.8% of 300p = 185p ✓ |
| Wave C Down | 5-wave impulse | 4,685 → 4,415 (270 pips) | 90% of Wave A = 270p ✓ |
Trade Plan:
1. Enter SHORT at 4,685 (Wave B high = Wave C entry)
2. Target: 4,415 (90-100% of Wave A down from 4,685)
3. Stop: 4,750 (above Wave B high)
4. R/R Ratio: 270 pips profit / 65 pips stop = 4:1 ✓
📋 Quick Reference: Zigzag Essentials
- Structure: A (5 waves) → B (3 waves, 61.8% retrace of A) → C (5 waves, 100% of A)
- Best Fib Levels: Wave B = 61.8% of A | Wave C = 100-123.6% of A
- Whole Zigzag Retrace: 50-79.6% of prior impulse
- Frequency: 50% standard, 25% extended, 15% truncated, 10% complex
- Most Reliable Trade: Bounce to Wave B retrace (61.8%), then short Wave C
- Key Rule: If Wave B >79.6%, it’s NOT a zigzag – reassess pattern
🎯 W-X-Y Correction Structure Breakdown:
| Wave Component | Wave Structure | Trading Implication |
| Wave W | 5-wave corrective pattern (down) | Initial correction move – establishes support level |
| Wave X | 3-wave countertrend move (up) | Connecting wave bounce – signals more correction ahead |
| Wave Y | 5-wave or complex pattern (down) | Final correction target – deeper than Wave W alone |
⚠️ Why W-X-Y Matters: Traders expecting a simple A-B-C zigzag often get stopped out when Wave X completes and Wave Y begins. W-X-Y corrections are deeper and last longer than simple zigzags. Use the 0.618-0.764 Fibonacci extension levels to anticipate Wave Y completion and prepare for the next impulse move.
⚠️ DISCLAIMER: This educational content is for learning Elliott Wave principles. Zigzag identification requires practice and market analysis. Not financial advice. Trading carries substantial risk – always use proper risk management, stops, and position sizing.
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