Jump to content

The Triangle


  • You cannot reply to this topic
No replies to this topic

#1
Nouf

    Advanced Member

  • Administrators
  • 60,942 posts
  • LocationBangkok, Thailand
There are 3 types of triangle, (although there is a new version called the "skewed" triangle, but that is yet to be really proved)

The contracting triangle which is the most common version that most will see, next is the barrier type, then the expanding type which is very rare, i have not seen many of that type, i cant actually remember the last one i saw its that rare

The contracting triangle is usually seen the most and generally in a wave 4 or wave B position, although triangles can be seen in the wave X of a WXY correction, or rare cases in wave Y as the end to combination move, although thats rare to see that

THE WAY TO TRADE IT

Ideally you should already be expecting some sort of 4th wave ideally or B wave, as the most common places to see a triangle, and a contracting one as well

So if you expecting a 4th wave triangle or some some sideways move, then the triangle is a favorite pattern to be seen in the 4th wave or B wave position

As its generally a contracting triangle tends to contract and tighten up and ready for a thrust depending on the direction it came from, as triangles are generally continuation patterns of the prior trend, so if it enters in a Bull market trend the expect the move to move to the upside and vice versa for a Bear market trend

The most common problem with triangles is that they tend to morph, so the point to be really sure about is the point at which you label wave [a]

As the issue arises when traders are looking for wave [e], but it pushes under wave [c] and is still in wave [c] only traders think its wave [e] but it does NOT push past the wave [a] point and then continues to morph thus taking out stops at the wave [c] point but NOT the wave [a] point

Triangles can be a great pattern to trade once you can find a decent entry pattern for the wave [e] and trade the expected thrust

They are best avoided to trade as the gyrations are generally choppy and complex and traders tend to get stuck in traps, so the key is that if you are expecting a potential triangle as such in a 4th wave, then give it time and let it develop, sideways tend to be a triangle or the start of one

Once you can find out where the wave [e] point is potentially ending, the stop is under the wave [c] point, but be warned as triangles do tend to morph, the better stop if its close enough to warrant that extra bit of risk is the wave [a] point, but thats not always possible as there may be a distance between the points wave [a] & [c]

So once you can find out the wave [e] of the triangle, the expected move is a thrust out of the triangle, although if your actually involved in the move, be careful NOT to outstay your welcome, as if your trading a thrust its more than likely its a 5th wave triangle thrust, so you can look at the smaller waves of the 5th wave, or a C wave, as both are 5 wave impulse waves, once the thrust is finished the reaction tends to be a quick reversal and the start of a new trend as the thrust is generally a 5th wave of an impulse or wave C of a ABC correction

With a little experience and screen time, they are easy to spot, in fact you have probably seen loads of them, but the rule of thumb is not to trade the actual triangle gyrations but to find the wave [e] point and get on the thrust out of the triangle for the 5th or C wave as thats the trade

Triangles are made up of 5 waves of 3 internal waves, and tend to whip around in a sideways trading band although the band tends to compress and ready for a thrust

Attached Thumbnails

  • Attached Image: types of triangle.PNG

To be there for the good times, you got to be there all the time - Ben Lichtenstein





1 user(s) are reading this topic

0 members, 1 guests, 0 anonymous users