Corrective waves are the most troubling and difficult to understand price formations under the Elliott theory. They come is such complex forms, even more on the currency markets, that experience traders still have a tough time dealing with them. It is not uncommon for a corrective wave to take complex shapes, like double or triple zig-zags, especially on the currency markets.
Corrections can have different structures, but mainly a correction it is being viewed as an abc structure that corrects a previous impulsive wave. Well that’s the theory, and it’s true, but things get complicated when you’re facing a correction within a correction. That means you are looking at a corrective move on the one hour chart, for example, that actually corrects another corrective move of a higher degree from the four hour or even daily chart.
They can take different shapes, like a zig-zag, a flat (running, irregular, common, elongated, etc), double and triple zig-zags, x waves, etc. Corrections are the most difficult waves to label and if you’re taking into consideration that actually price is consolidating in more than 60% of the time, you know that if you are trying to apply Elliott waves theory to the currency markets you should expect corrections/consolidations areas all over the place.
Things like retracements, proportions, equality between the legs, severity of the move, alternation, should be well anchored in your understanding of the theory.
Book recommendation: Glenn Neely, Eric Hall, “Mastering Elliott Wave”