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Elliott Wave Theory Structure : A Running Triangle

Triangles are overlapping five wave structures that subdivide into five, three swing moves as 3-3-3-3-3 that give pause and consolidates the progress made during a motive wave trending move that can be either bullish or bearish. In impulsive waves these will be seen only in the fourth waves of a five wave impulse and never seen as a stand alone structure in wave two. It is relatively common seeing triangle structures in three swing moves as the connector wave between the wave W or A with the triangle itself being the wave B or wave X connector. Then the thrust from the triangle resumes in wave C or Y in the same direction as the preceding wave W or A .

In these particular running triangle structures, what you will see is the wave “b” to exceed the origin point of wave “a” in either a bullish or bearish market. One indicator we will use to identify the possibility of a triangle being in progress is the RSI. The wave “a” and “b” will show the high and low points of the rsi reading as well as price with the wave “c”, “d” & “e” contracting smaller each swing in both rsi and price until it reaches it’s terminus and resumes it’s previous trend. For this illustration purpose seen below, the dotted lines preceding the “a” waves of the triangle can be either the wave 3 , a wave A or W and after the “e” wave terminates the triangle the dotted lines resume the preceding trend in either a wave 5 , wave C or Y.

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Kind regards & good luck trading.

Lewis Jones of the elliottwave-forecast.com Team