Being a corrective wave, a flat should be seen either as a second wave, or being part of a second wave correction, either as a fourth wave, or being part of a fourth wave correction, or as being part of a contracting triangle.
Whenever a flat is part of a contracting triangle it is being called as being an elongated flat. All the rules of a flat apply to an elongated flat structure as well, with the following additional criteria:
- wave c must be more than 138.2% of wave b (preferably more than 161.8%);
- wave a and wave b should be similar in price and/or time.
One of the most interesting and useful facts about the elongated flats is that they are appearing almost exclusively as being part of a triangle, as the whole segment of a triangle or just a part of a leg of a triangle. This information is extremely useful when counting waves because triangles, especially contracting triangles, are common patterns to be met in the fourth waves, b waves, or even at the end of complex corrections (double or triple combinations).
The recordings that come with this sub chapter will take a look at some elongated flat examples on the gbpusd weekly chart as price developed there a nice contracting triangle.
If elongated flats are part of a pattern of a higher degree, they can come as wave 1, 3, or 5 of a terminal impulse, or as wave e of an expending triangle (even though this pattern is quite rare) or as waves a, b, c, or d of a contracting triangle (most common place for an elongated flat to be met).