X waves

X waves

X waves

X waves belong to the category of corrective waves and they always act as intervening or connective waves. This means that you will always see them between two corrections, i.e. they will always be a part of complex corrective waves, not simple ones. Naturally, since they are a type of corrective waves, you can always count on them to go against the main trend. In this article, you will learn everything you need to know about X waves, so that you can further improve your trading skills. Be advised though, this topic is suited for more experienced traders, so if you’re still a beginner, we recommend examining something more basic. Otherwise, let’s get going.

X waves | What to consider

Because of their nature (which is further explained by the Elliot Wave Principle), X waves are, as we have already said, intervening waves. That also means that certain parameters have to be adjusted for them. Expiration dates are a good example of that because you are not likely to have much success if you pick short-term trades. It takes time for complex waves to develop. Striking price can also be affected by the nature of these waves. Also, generally speaking, X waves are usually less complex than the corrections preceding them, too. However, they do come in two different forms and that’s what we will be talking about in the next paragraph of this article. Stay tuned!

X waves | Types

When discussing them, we always must mention that there are two main types of X waves – small and strong waves. Fibonacci Retracement plays a key role in distinguishing them, as the strong waves end above the 61.8% border of the first correction, whereas the small waves remain under that limit. This allows much easier predictions when it comes to the situation on the right side of your screen, as you know approximately what to expect. Contracting triangles are also fairly common in these situations, so you will know that you have to react once a side of that triangle is broken. In any case, X waves can tell you what’s coming up. However, you will have to determine their type before you can make a prediction.

X waves | Conclusion

To summarize, X waves can be tricky to pinpoint on your chart, but once you do that you will be on the right track. They come in two basic types and serve to connect two different corrections. Fibonacci retracement is vital in determining those types, and if you can successfully do that, you can hope to predict the right side of your chart fairly accurately. Knowing Elliot Wave Principle is a must, which is why learning about these waves is more suited to experienced traders. Expanding your knowledge is what can make you a successful trader, and in that respect familiarizing yourself with these waves is a great idea, provided that you have mastered the basics, of course.



1. How To Make Money In Stocks (William J. O’Neil, 1995)
2. Options and Options Trading (RW Ward – 2004)
3. The Forex Options Course: A Self-Study Guide to Trading Currency Options (A Cofnas – 2008)
4. Applying extending classifier system to develop an option-operation suggestion model of intraday trading–An example of Taiwan index option (AP Chen, YC Chen, WC Tseng – 2005)
5. Rich Dad, Poor Dad (R. Kiyosaki, 2000)

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Author: Ben Prescott

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