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Corrective Structures.
TRIANGLE. TAKEAWAYS

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MAIN TAKEAWAYS

  • Triangles are constructed of five waves that are labelled as a, b, c, d and e.
  • Each wave of a triangle fractal is constructed of three subwaves
  • In up trend waves of a corrective triangle bounce between a downtrend from above and up trend or horizontal support below.
  • Each wave of a triangle starting from wave b is shorter than the previous wave
  • After a set of four or five waves decreasing in size and volume the majority of traders stop trading and start to wait either for breakdown or breakout through contracting trend lines
  • There are many cases when the final wave e plays a fake breakdown only to fool traders and run stop loss orders.That fake move under a strong support quickly reverses and gives birth to a strong rally in direction of the main trend
  • When all five waves of a corrective triangle finally play out completing the triangle fractal the trend interrupted by a triangle resumes with a powerful spiky move.
Learn why waves B are the hardest to predict

Case Studies:

The best way to understand how this pattern works is to study collection of charts with real life examples.

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  1. Introduction to Section 6 “Corrective Waves”.
  2. Simple Zig-Zag.
  3. Correction shaped as a Simple Zig-Zag.
  4. Regular Flat.
  5. Bonus: Trading corrective waves shaped as a Regular Flat.
  6. Running Flat.
  7. Expanded Flat.
  8. Correction Shaped as a Triangle.
  9. Bonus: Triangle can play dirty tricky games.
  10. Triangle: Key Takeaways.
  11. Wave B is the least predictable beast.
  12. Bonus.Wave B explained.
  13. Two types of corrective structures: “through time” vs “throw price”.
  14. Complex Corrective Pattern: Double Three.
  15. Guidance on Alternation Between Corrective Waves

MAIN TAKEAWAYS

  • Price never travels in a straight line for too long, it travels in zig-zags shaped as A-B-C
  • Wave A is an initial Action, Wave B is a reaction to the first move, Wave C is a resolution to both preceding waves A and B
  • In up looking A-B-C fractal the starting point of the wave A is the main support for the whole A-B-C up fractal. Reactionery Wave B down may come back up to the lowest point of A but never should violate it
  • In down looking A-B-C fractal the starting point of the wave A is the main resistance for the whole A-B-C down fractal. Reactionery Wave B up may come back up to the highest point of A but never should violate it
  • In up looking A-B-C fractals Wave C either retests or more often makes new higher high over a high made by Wave A.
  • In down looking A-B-C fractals Wave C either retests or more often makes new lower low under a low made by Wave A.
Learn why waves B are the hardest to predict

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This is what you are going to learn in the next section about the Five Wave Fractal

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Case Studies:

The best way to understand how this pattern works is to study collection of charts with real life examples.

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