Lesson 11 · reference

Cheat sheet & glossary.

Every term in one place, and how to read the labels and colors on our charts.

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The short version

This is the reference for the method: how to read the labels and colors on our charts, where amber is FLAT, green is LONG and red is SHORT, and a plain-language glossary of every term, from impulse and correction to spring, anchored VWAP, invalidation and confluence.

Reading our charts

The colors and labels on every chart here mean something specific. This is the key.

amberFLAT: we're standing aside. The structure has a lean, but not enough conviction to hold a position. Amber is honest about a coin-flip.
greenLONG: the read favors upside; the count and levels support being positioned up.
redSHORT: the read favors downside; positioned for a decline.
[5] · (A)Wave labels. Brackets/letters mark the degree; [5] is a completed fifth wave (a top candidate), A-B-C or W-X-Y mark corrective legs.
?A question mark on a label means that leg is in progress / unconfirmed: the count's best guess, not a finished move.
dashedOn setup charts, dashed lines mark the levels: entry band, stop, targets (T1–T5), invalidation, and AVWAPs.

Glossary

Impulse
A five-wave move in the direction of the trend.
Correction
A three-wave move against the trend.
Degree
The scale of a wave, from Grand Supercycle (decades) to Subminuette (minutes).
Phase
The Wyckoff stage: accumulation, markup, distribution, markdown.
Wave 3
Usually the strongest, longest leg: where the crowd piles in. Never the shortest.
Wave 5
The last leg, often on fading momentum. The riskiest place to chase.
Zigzag
A sharp, deep A-B-C correction.
Flat
A shallow, sideways A-B-C: a strong trend just resting.
Triangle
Five coiling legs (a-e) that narrow to a point before a final thrust.
Complex correction
Two or three simple patterns chained by X-waves: a double (W-X-Y) or triple (W-X-Y-X-Z).
Accumulation
A quiet range where big money buys before markup.
Distribution
A quiet range where big money sells before markdown.
Markup / Markdown
Wyckoff's trending phases: the impulse up (markup) and the corrective decline (markdown).
Spring
A false break below support: a bear trap before the move up.
Upthrust
A false break above resistance: a bull trap before the drop.
AVWAP
Anchored VWAP: the average price paid since a key event; the crowd's break-even.
Invalidation
The price that proves a count wrong. Your stop, set by structure.
Confluence
Two or more methods pointing at the same price: where a level gets serious.
Fib retracement
Ratios (38%, 50%, 62%) that pullbacks tend to respect.
Fib extension
Ratios (1.618×, 2.618×) that project where a wave may end.
That's the whole method

Nine lessons, three tools, one loop: structure, direction, levels, and the discipline to stay flat when they disagree. You now read the site the way we write it. Follow the free weekly Nasdaq read and watch the process work on a live chart.

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Common questions

What do the colors on the charts mean?

Amber means FLAT, standing aside because the structure leans but conviction is low. Green means LONG, the read favors upside. Red means SHORT, the read favors downside. The colors state the position the analysis is actually taking, coin-flips included.

What is the difference between an impulse and a correction?

An impulse is a five-wave move in the direction of the trend. A correction is a three-wave move against it. Five with the trend, three against: that count is the backbone of the whole method.

What does degree mean in Elliott Wave?

Degree is the scale of a wave, from Grand Supercycle spanning decades down to Subminuette spanning minutes. The same five-up, three-down pattern repeats at every degree, nested inside the larger ones.

What does a question mark on a wave label mean?

That the leg is in progress or unconfirmed: the count's best guess, not a finished move. It is a deliberate mark of honesty, separating what the structure has confirmed from what it is still projecting.