Impulsive vs Corrective Moves Explained
Impulsive and corrective moves
Unlike Hub 3.0, impulsive moves and corrective moves are defined by Hub 4.0 as follows:
- When the market is bullish and the big players take buying action, or when the market is bearish and the big players take selling action, this creates an impulsive move.
- When the market is bullish or bearish and retail traders take buying or selling action, this creates a corrective move.
In other words:
- If market momentum goes straight up and creates an HH, we call that an impulsive move, or if the market goes straight down without any pullback, we also call that an impulsive move.
- A corrective move is buying and selling at any position, creating a larger structure (a flag shape).
Market structure
Market structure refers to the current state and behaviour of the market. It provides deep insight into whether the market is trending or not.
The diagram below will explain in detail market structure and its complexity.
Note that the up and down moves nested inside a smaller timeframe will create a larger corrective structure (a small flag inside a large flag). Learn more in Part 3 on the patterns.
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