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Thread: How to trade Triangle pattern successfully

  1. #1
    Join Date
    Oct 2011

    How to trade Triangle pattern successfully

    Trading triangles (based on Elliot waves)

    Hello all ,hope you are doing great with your trading .
    In this thread I will try to explain in details about the different triangles that can be found on a chart based on Elliot wave theory .

    Firstly , why triangles occur in the market ?
    as we all now that the price moves in a market according to the amount of supplies and demands are there in the market .If the price in an up trend , we know that demands have exceeded supplies and vice versa for a down trend. The question now is, what will happen if the supplies and demand are almost equals?. The price will struggle in no clear trend moving up side down until either the bears or the bulls win .This can be found on a chart as tow trend line moving in a different directions forming a triangle.

    Secondly , what are the different type of triangles?
    1-contracting (more common)
    where the tow trend lines cross each other after the price break one of them (after wave e ending point)

    where the cross happens before the end of the triangle (before wave a beginning point)

    Thirdly :what are the different type of the contracting triangles ?
    1.limiting 2. non-limiting
    there is very little different between the tow types . The non-limiting triangles will behave slightly different around the converging trend lines than limiting triangles.
    *the most distinguish non-limiting action is congestion right into or very near to the apex point .this can be measured by calculating the time from the triangle start at the begining of wave a until the end of wave e , if the converging trend lines occur before 20% of that time (added to the end
    of wave e) has elapsed ,that defined (very near or right into ).
    *limiting triangles will have the apex point between 20 to 40 % of the time from the begining of wave a to the end of wave e,added to the end of wave e.
    *if the converging trend lined occur after 40% this will be consider as non limiting

    Fourthly :how can we benefit from knowing the different type of contracting triangles ?
    we should enter the trade after wave e ends by breaking the trend line . In limiting triangles the price thrust after wave e should not be less than 75% of the largest wave in the triangle .which will be our target in the trade

    In non limiting triangles : the price thrust after wave e is it is not confined to any specific amount ,usually it is a corrective and short lived , price will then return to the original trend.So it is recommended that your target should be fast ,and based on other larger pattern.

    Finally :an image to show the different type of contracting triangles

    Next ,expanding triangles
    I hope you find this helpful and excuse my english , i,m not a native speaker , i,m from United Arab Emirates
    Attached Thumbnails Attached Thumbnails How to trade Triangle pattern successfully-00000649.jpg   How to trade Triangle pattern successfully-00000650.jpg  
    dezire, JohnCapa, fantom and 1 others like this.

  2. #2
    Join Date
    Oct 2011
    Expanding Triangles

    Firstly : what are the general rule that defined an expanding triangle ?
    1- wave a or be will always be the smallest segment on the triangle
    2- wave e will be almost always the largest wave of the pattern
    3-wave e will be the most complex and time consuming segment in the triangle .
    4 - wave e will almost always confirmed ending by breaking down the trend line drown from the end of wave a to c as does in contracting triangles ,but the price thrust after the break should not be larger than wave e
    5 - backward from wave e , three of the previous waves must be at least 50% of the wave to the right
    Secondly : what are the types of expanding triangles ?
    same as contracting triangles , there is tow types in expanding triangles
    this deviation unlike contracting triangles only refers to whether the triangles is in a standard wave position or part of more elaborate corrections involving multiple formation connected end to end

    Thirdly : what are the properties of Limiting expanding triangles ?
    1-Limiting expanding triangles appear to be possible only in irregular failure or C-failure flat pattern
    2-The price thrust out of the triangle is minimal, retracing approximately 61.8% of the triangles from highest to lowest point.

    Fourthly : what are the properties of Non-limiting expanding triangles ?
    1-Non-limiting expanding triangles refers to triangles which form within more complex formations .
    2-the price thrust after breaking the trendline should be as large as the largest wave in the triangles
    3-Non limiting can be distinguished by the location of the apex point (which in this case will be backward in time) .Measuring the time consumed by the triangle ,the taking 40% of that amount and subtracting it from the beginning of wave a , the apex point will occur before 40 % of that time .

    Finally , an image showing how expanding triangles will look like in live markets ,

    I hope you find thid helpful .
    dezire and JohnCapa like this.

  3. #3
    Junior Member
    Join Date
    Sep 2013
    This one of the most common technics. But using only one of them is not the best idea. What I can use to confirm the entry?

  4. #4
    Junior Member
    Join Date
    Aug 2017
    Thanks for the helpful post, what sort of win rate can we expect from trading triangles?

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