Triangle Correction:
In addition to the 3-wave correction patterns, there is another pattern that appears time and time again. It is called the Triangle pattern. The Elliott Wave Triangle approach is quite different from other triangle studies. The Elliott Triangle is a 5- wave pattern where all the waves cross each other. The five sub-waves of a triangle are designated A, B, C, D, and E in sequence.
Triangles are by far most common as fourth waves. One can sometimes see a triangle as the Wave B of a 3-wave correction. Triangles are very tricky and
confusing. One must study the pattern very carefully prior to taking action. Prices tend to shoot out of the triangle formation in a swift “thrust.”
When triangles occur in Wave 4, the market thrusts out of the triangle in the same direction as Wave 3. When triangles occur in Wave B, the market thrusts
out of the triangle in the same directions as the Wave A.
How do you trade triangle correction?:
You need to place two trend lines- one from b to d sub waves (above PA) and one from a to c to e sub waves (below PA)- In a bullish example (see chart)- once d to e sub wave is completed ( see noted long legged doji on chart)- this would have been your low risk high reward time to initiate a buy trade via daily chart.
Within 20 days (do you have the P A T I E N C E ?)- you would have made a 1:6 risk and reward on your investment- which is great.
In addition to the 3-wave correction patterns, there is another pattern that appears time and time again. It is called the Triangle pattern. The Elliott Wave Triangle approach is quite different from other triangle studies. The Elliott Triangle is a 5- wave pattern where all the waves cross each other. The five sub-waves of a triangle are designated A, B, C, D, and E in sequence.
Triangles are by far most common as fourth waves. One can sometimes see a triangle as the Wave B of a 3-wave correction. Triangles are very tricky and
confusing. One must study the pattern very carefully prior to taking action. Prices tend to shoot out of the triangle formation in a swift “thrust.”
When triangles occur in Wave 4, the market thrusts out of the triangle in the same direction as Wave 3. When triangles occur in Wave B, the market thrusts
out of the triangle in the same directions as the Wave A.
How do you trade triangle correction?:
You need to place two trend lines- one from b to d sub waves (above PA) and one from a to c to e sub waves (below PA)- In a bullish example (see chart)- once d to e sub wave is completed ( see noted long legged doji on chart)- this would have been your low risk high reward time to initiate a buy trade via daily chart.
Within 20 days (do you have the P A T I E N C E ?)- you would have made a 1:6 risk and reward on your investment- which is great.