# Flats (3-3-5) and Expanded Flats

### Video Transcription:

Hello, traders. Welcome to the Elliott Wave Theory course, and the second module, Elliott Wave Patterns. In this lesson, we’re going to talk about flats and expanded flats, which are actually corrective patterns, which means that we are going to find them in trending markets and that we are going to look for them once price starts to correct in the opposite direction.

Now let’s start by defining what these patterns are. A flat correction differs from a zigzag in that the sub wave is a 3-3-5 instead of a normal five-wave sequence that we find on the zigzags. Now this might seem a little complicated but it’s actually not. The 335 is an Elliott Wave nomenclature for the count of the sub waves within the flats. After a strong move in the market, price will start to correct sometimes in a flat structure. In a flat correction, the first actionary wave or wave A lacks sufficient force to unfold into a full five-wave pattern. This is why the corrective move inside of the flat correction is actually flat. And the price doesn’t move in a flat pattern to the opposite side but it actually moves in a sideways manner inside of a flat correction.

The B wave seems to inherit this lack of counter-trend pressure and ends near the start of wave C. This means that, wave B which is the second wave inside the flat correction will end around at 76.4 to 88.6 Fibonacci retracement of wave B. This means that wave C will end around the end of wave A. Now this is right here. Wave C terminates just slightly beyond the end of wave A at around 113% to 127.2%.

Now these are two examples of what a flat correction looks like. In this example, this is a bullish flat. The market was just trending up, and then we started to correct inside a flat pattern. This is the first wave and you can see that the second wave or wave B ends at around 88.6% of wave A and wave C ends at around 113% of wave B. And then price continues with the uptrend.

Now the same goes with a bearish flat. Price is going down and then we start to correct to the upside and we make a wave A. Then wave B has to end at around 88.6% of wave A and wave C at around 113% of wave B for it to be a flat corrective pattern. And then we have a continuation of the bearish move. Now this is what a flat correction looks like, and you will notice that you will find them a lot in trending markets and also in very strong trading markets. Because when we have a not so strong move to the upside or to the downside, the correction seems to be very deeper. But when we have a very strong market, the corrective move seems to be flattish and there is where we’re going to find these opportunities. And because we are in a very strong move, the opportunities for profits are even larger.

Now let’s talk about expanded flats for a minute. In expanded flats, wave B terminates beyond the start of wave A around 127.2% and wave C ends substantially beyond the end of wave A around 127% to 161.8%. Now this is, too, a flat correction but you will see that it looks more like an expanding flat correction because the wave B ends above wave A and wave C beyond the end of wave A.

Now this is what the expanded flat look like. You can see that, in this example, price was going up, then we decided to correct and we made wave A. Then wave B ended at around 127.2%, then wave C ended between 127% to 161.8% and then price continued its up move. The same goes for a bearish expanded flat, price was going down, then we made wave A. Wave B ended beyond the beginning of wave A at around 127.2. Wave C ended above or beyond the end of wave A between 127.2 and 161.8 and then price continued to the downside. Now this is just the corrective moves that you need to focus on when you are in a trending market. And when you notice that price starts creating a flat pattern, you need to draw your Fibonacci tools and wait for point C for you to be able to take on a very high-probability trade on a very low risk to reward scenario.

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