Hi Guys,

I'm sure you must have heard about converging triangles trading method.

To refresh your memory, here's a quick summary.

Identify swing high/low points on the chart and plot trend lines.

The rules are:

Swing A > Swing C

Swing B < Swing D

The opposite for bearish/SELL opportunities.

Trade Entry Rules:

Wait for price to cut above the trend line AC and open trade after the first candle closes above the AC trend line.

Stop Loss would be set to the previous candle's low or the most recent swing low.

Target Price would be:

Half the pips of AB.

Ex: If Point A to Point B was 20 pips difference, then target price would be 10 Pips from trade entry.

Now, Wolfe Waves tells us that we can ride after wave point 5 is formed. By plotting trend line AD (or 1, 4 in WW terminology) and the convergence of 1, 3 (or AC) and BC (2, 4) we get an estimated time when the target price is reached.

Now if we combine these two methods, we can potentially ride the trade two ways (ex: uptrend as well as downtrend).

Below is a quick summary from EURUSD H4 charts, plotting the points based on the rules from Triangle Convergence. (Click on the EURUSD chart to visually follow the text below)

Now what I did was from the Wave 5 point, I multiply the pips distance from our entry to the peak and substract that from the peak price point, which gives us the approximate price where the downtrend will end.

Explanation of the chart below:

Point A = 1.29942

Point B = 1.28434

Total Distance = 0.01508

Divide this by 2 and add to our entry point which is 1.29716. So our target price is (1.29716 + (0.01508/2)) 1.3047

Now this becomes our Wave 5 for Wolfe Wave. But to make the price estimate a bit more accurate, I multiply 0.00754 by 3. Or in other words, substract quarter pips more to the distance between points A and B.

Therefore, from 1.3047 our approximate target price is

1.28208 (1.3047 - (0.00754x3))

To stretch this a bit further, if you calculate the # of candles it took to reach the first target price and multiply that by 3, we would approximately get the # of candles for price target #2 to be reached.

In the chart below, it took 16 hours or 4, H4 candles to reach our first target price. Then on the downtrend, we expect price to reach within 48 hours or 12 H4 candles.

Price reaches our estimated price in 44 hours.

So how can we use this method?

1) Wait for converging Triangle to be formed, plot target price.

2) IF target price is reached, we then calculate # of candles & Target price in pips

3) You can round off the target price to a few pips lower and set TP and enter the trade

4) Based on # of candles from Triangle to peak, we multiply that by 3 to get a better idea when price will reach our TP

What I would like you to do:

- Do you trade this method? Or maybe its already there somewhere with a different trading name? (Maybe help in identifying elliott wave 3?)
- Do you trade triangles exclusively? If yes, can you add to this thread with constructive criticism/suggestions?
- Do you trade Wolfe Waves (or gartley or XABCD)? If yes, can you add to this thread with constructive criticism/suggestions?
- Can you contribute to this thread by looking at charts and trying to see if the price estimates for triangles and the Wolfe waves does indeed reach?

Charts:

Attached, EURUSD Chart with description.

USDCHF chart with just basic info. What's to note is the # of candles. It took 40 candles to reach our price target from triangle. So we expct wolfe wave 5 price estimate to reach in 40x3 (120 candles). In actual, price reached after 139 candles (not too far away from estimated time)