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Definition of 'Corrective Waves'
A set of stock price movements that occur against the main trend according to the Elliot Wave method of technical analysis. According to the Elliott Wave theory, stock price movements occur in predictable cycles. These movements are broken up into motive waves and corrective waves. Motive waves are stock price movements in the direction of the trend, and corrective waves are movements against the trend. Together, motive waves and corrective waves form certain patterns which are the basis of the Elliott Wave theory.
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Investopedia explains 'Corrective Waves'
Elliott Wave theory was developed by Ralph Elliot, and introduced in his 1938 book, the Wave Principle. The theory was expanded by A.J Frost and Robert Prechter in the Elliott Wave Principle: The Key to Stock Market Profits. The theory is controversial, and is difficult to verify, due to the subjective aspects involved in its implementation. Also, as a technical analysis technique, the Elliot Wave theory runs against the efficient market hypothesis, a dominant theory in modern finance.
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Search results for 'Corrective Waves'
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http://www.investopedia.com/articles/technical/111401.asp
... Elliott labeled these "impulsive" and "corrective" waves. ... Five waves move in the
direction of the main trend followed by three corrective waves (a 5-3 move). ...
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http://www.investopedia.com/university/advancedwave/elliottwave2.asp
... similar situations. Creator RN Elliott showed that these movements occur
in a series of impulse and corrective waves. (To learn ...
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http://www.investopedia.com/university/advancedwave/elliottwave4.asp
... impulse wave 3. Impulse waves occur in waves of five while corrective waves like
the one we see if Figure 1 between 2000 and 2002 occur in waves of three. ...
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http://www.investopedia.com/articles/forex/09/trade-with-the-trend.asp
... waves. These waves are called impulse waves when in the direction of the
trend and corrective waves when contrary to the trend. By ...
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http://www.investopedia.com/university/advancedwave/elliottwave3.asp
... As long as he or she determines the primary direction of the trend, properly
differentiates between the primary and corrective waves and uses tight stops and ...
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http://www.investopedia.com/articles/forex/11/Harmonic-Patterns-In-The-Currency-Markets.asp
... The bullish pattern is often seen early in a trend, and it is a sign the corrective
waves are ending and an upward move will ensue at point D. All patterns may ...
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http://www.investopedia.com/university/advancedwave/elliottwave5.asp
... can still be profitable if he or she determines the primary direction of the trend,
properly differentiates between the primary and corrective waves, and uses ...
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http://www.investopedia.com/university/advancedwave/elliottwave1.asp
... The first pattern Jones observed was a series of three waves (each of which was
interrupted by a retracement or corrective wave) in which the first wave was ...
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