ABC Correction
Entry

After a strong 5-wave impulse completes, price enters a corrective ABC pattern. Enter on the completion of wave C (typically 0.618-1.272 of wave A) to catch the resumption of the primary trend.

Elliott Wave1H, 4H2.5:1 R:RModerateTrending
0.618-1.272×A
Wave C Target
2.5:1
Typical R:R
Deploy This Strategy See Rules

Rules & Configuration

The full rule set, required indicators, suggested configuration, execution flow, and performance parameters for the ABC Correction Entry setup.

After a strong 5-wave impulse completes, price enters a corrective ABC pattern. Enter on the completion of wave C (typically 0.618-1.272 of wave A) to catch the resumption of the primary trend.

Indicators Used
Fibonacci RetracementSwing High/Low
Rules
📈 Long after ABC Down
  • Identify completed 5-wave bullish impulse
  • Wave A: initial pullback from impulse peak
  • Wave B: counter-rally, typically 0.382-0.618 of A
  • Wave C: final leg down, extends 0.618-1.272 of A
  • Enter long at completion of wave C with bullish reversal candle
  • Stop: below wave C low
  • Target: new high beyond wave 5 peak (minimum)
🚫 Invalidation
  • Wave C extends beyond 1.618 of wave A. Likely new impulse down, not correction
  • Wave B retraces more than 100% of wave A. Corrective structure invalid
  • Clear 5-wave structure not visible on chart. Skip, use different setup
0.618-1.272×A
Wave C Target
2.5:1
Typical R:R
💡 Pro Tip

Wave C is the 'final surrender'. Retail capitulates, momentum indicators make new lows even as price approaches the ideal termination zone. Bullish divergence on RSI or MACD during wave C is a classic confirming signal.

Common questions

What is the ABC Correction Entry strategy?

After a strong 5-wave impulse completes, price enters a corrective ABC pattern. Enter on the completion of wave C (typically 0.618-1.272 of wave A) to catch the resumption of the primary trend.

What's the pro tip for trading ABC Correction Entry?

Wave C is the 'final surrender'. Retail capitulates, momentum indicators make new lows even as price approaches the ideal termination zone. Bullish divergence on RSI or MACD during wave C is a classic confirming signal.

When should I NOT use the ABC Correction Entry strategy?

Skip this setup when: Wave C extends beyond 1.618 of wave A. Likely new impulse down, not correction Additionally, Wave B retraces more than 100% of wave A. Corrective structure invalid Additionally, Clear 5-wave structure not visible on chart. Skip, use different setup

What indicators does the ABC Correction Entry strategy use?

The ABC Correction Entry strategy uses the following indicators: Fibonacci Retracement, Swing High/Low. These can be configured directly in AlgoBars AlgoBuilder.

What timeframe works best for ABC Correction Entry?

The ABC Correction Entry strategy is best traded on the 1H–4H timeframe. This can be adjusted based on your trading style and market conditions.

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