The zigzag family.
Zigzags are the basic correction models. They belong to the class of sharp corrections, since no part of the model can go beyond the base of the figure. The whole family belongs to the simple rather than combined corrections, which is due to the internal interchangeability wherever it is not forbidden by other rules.
Single zigzag (Zigzag, ZZ).
On the chart, it is denoted by the letters ABC. The most common representative of the zigzag family.
The rules of the ZZ structure:
- A zigzag is always subdivided into three waves.
- Wave A is always an impulse or initial diagonal.
- Wave B is always a zigzag, a plane, a triangle, or a combination.
- Wave C is always an impulse or end diagonal.
- Wave B never goes beyond the base of wave A.
- Waves A and C are almost always impulses.
- Wave C always ends beyond the price territory of wave A. In other words, C always ends beyond the end of wave A. There are no truncated zigzags. A truncated zigzag in real time = a losing trade.
- The line connecting the ends of waves A and C is often parallel to the line connecting the end of wave B and the beginning of wave A. (Predictive value: wave C often ends when reaching the line of the trend channel, built from the base of wave A to the end of wave B, postponed from the end of wave A).
- Wave C is often equal to the length of wave A. Also wave C is 62% / 162% of the length of wave A.
- Wave B usually corrects from 38% to 79% of wave A.
- If wave B is a running triangle, the correction is usually 10% to 40% of wave A.
- If wave B is a triangle, the correction is usually from 38% to 50% of wave A.
- If wave B is a zigzag, the correction is usually from 50% to 79% of wave A.
Double zigzag (DZZ).
On the chart, it is denoted by the letters WXY. It inherits the rules of construction of the model and rules for a single zigzag. DZZ manifests itself as a complication of a single zigzag to a compound zigzag of the ZZ-X-ZZ type, where X is a correction wave. The doubling of a simple zigzag is necessary in order to create an adequate price correction.
Since DZZ inherits the rules and regulations of ZZ, X, just like B, can take any corrective form. X cannot go beyond the beginning of W and has the same correction rules as B of a single zigzag. Truncations are also not allowed.
DZZ structure rules:
- Wave W is always a single zigzag.
- Wave X is always a zigzag, a plane, a triangle, or a combination.
- Wave Y is always a single zigzag.
- Wave X must break the trend channel formed by the first zigzag of wave W and be greater than 80% of sub-wave b of wave W.
- Subwave b of wave Y must be less than wave X.
- The sub-wave b of wave Y must not break the line drawn from the base of wave W to the end of wave X (line 0-X).
Importantly, a DZZ may appear in place of a single zigzag where it is not prohibited by the rules. For example:
- W and Y waves may only contain single zigzags. There can not be double ones!
- In the waves of diagonals, in place of the single zigzags, there can be an unlimited number of double zigzags. However, the multiple complication of the model signals that it is most likely worth reconsidering the calculation.
- In triangles, only one model complication is allowed. If there has already been one complication, DZZ should not be expected. If a DZZ is formed and one wave has already been complexed before that, the pattern should be revised.