The Diagonal Triangle Method

[clam61]

TraderTalk Technical Tutorial

Diagonal triangles
These triangle formations are not common. Diagonal triangles occur as final, exhaustion, movements of trends and corrections of trends. In Elliott parlance they therefore occur only in the fifth wave of impulse waves of bull or bear trends or in the fifth wave of the C wave of corrections. Once recognized they can be observed to near completion and trusted as an opportunity to act, as they always foretell a sharp reversal of the trend. The minimum amount of price reversal to be anticipated is a complete retracement to the level at which the triangle began.



Characteristics of a diagonal triangle are the following
The price movements within a diagonal triangle occur in three waves in the direction of the trend 1, 3 and 5 and two of correction 2 and 4. Each trend wave (1, 3 and 5) is made up of 3 waves only as are the corrective waves (2 and 4). Another fundamental requirement is that the extreme of corrective wave 4 must overlap the extreme move of wave 1, i.e. in an up trend the base of wave 4 must be lower than the top of wave 1 and in down trends the top of wave 4 must overlap the bottom of wave 1.

[clam61]

some of these are new...some are old

[clam61]

[HititUP]

Looks like wolfe wave to me.

I have had good success with it thus far, however I havn't seen a proper setup that I am comfortable with it for a few days now on EUR/USD.

I'm keeping my eyes open though..

[techno791]

Combination elliott wave and wolfe wave targeting maybe. Very interesting. I like it when they combine market occurances that are well known already. Rule of Five, Elliott waves, drawing straight lines between an odd and even number, etc.

I really need to be on a lookout for these when the action is, instead of when the market slows.

[clam61]

a w***e w**e is an ending diagonal.

there are tons of setups when you go to the minute charts

[downloads_be]

Eur/USD is forming a nice Wolfe Wave at the moment

[Sheldon]

To me, it just looks like a bunch of randomly drawn lines. Very confusing...

[sirensiren]

Think of it this way Sheldon. It's like pressing together a balloon. All that compressed energy has to break out somewhere so the balloon eventually pops. So think of the traingle that forms on the line as your hands pressing together a balloon and as you press harder and harder (i.e your hands are getting closer together, just as the two lines of the triangle come closer to intersecting) then the triangle pops to the upside or downside.

[Sheldon]

Oh no I understand how triangles work, I've used them a lot in stocks. But these are a lot different (to me).