A wave: Most market participants believe that the market trend has not yet reversed and is only regarded as a short-term adjustment. After the A wave of flat adjustment, the B wave will appear in an upward zigzag shape. If Wave A runs in a zigzag pattern, while wave B is mostly a flat correction wave.

B wave: The upward trend is more emotional, and the bullish trap of traditional charts appears. Market participants mistakenly believe that the previous rising wave has not yet completed, and transactions are sparse.

C wave: Strong destructive power, very similar to the characteristics of the third wave, with an overall decline.

Characteristics of wave A, wave B, and wave C:

C wave can be further divided into five lower-level waves. Therefore, wave C can also be regarded as a downstream wave. Five waves, the traitor of three waves against the current. The five waves of wave C represent that the entire market adjustment process has been completed, and the market will turn back upward.

When analyzing and adjusting the wave market trend, chart analysts must be extremely careful due to the many changes. For example, three waves may constitute wave A of a flat correction, but they may also represent the entire wave of a zigzag correction (A, B, C).

Reference for the above content:

Baidu Encyclopedia-Five Wave Theory