Elliot Waves Complete Guide | Chapter 3.3 - "Running, Contract"
Updated
Hello Traders. Welcome to Chapter 3.3, where we talk further about a different form of corrective waves, the Flat and Expanded correction. In chapter 3.3 I discuss the last of the types of flat corrections! Here, we will also dissect the contracting triangle, also known as the symmetrical triangle by many traders.
Chapter 3 Glossary:
3.1 Zig-Zag Waves
3.2 Flat Correction , Expanded Flat
3.3 Running Flat, Contracting Triangle
3.4 Barrier Triangle, Expanded Triangle
3.5 Double-Three
3.6 Triple-Three
-----
Running Flat
The is the last type flat correction: the running flat variation. It is the least common one, but has the same 3-3-5 structure. This one is hard to spot because a rising wedge is usually considered bearish for many and the last wave is where you will find the confirmation. For these, you want to trade the breakout.
Rules:
• Wave B ends above the beginning of wave A
• Wave C ends higher than the end of wave A
• Usually wave C is the same length as wave A.
→ This kind of correction happen in really strong and fast markets, especially Bitcoin. The fast and high push of wave B and the short wave C are signs of a strong primary trend.
A parallel channel regularly marks the low of
wave C, marked by the yellow lines!
Contracting Triangle
Triangles represent a balance and even pressure of buyers and sellers within the market. They contain five overlapping waves with a 3-3-3-3-3 structure. The contracting triangle represents the most frequently appearing.
Rules:
• Triangles have 5 Waves: A-B-C-D-E
• All of the waves are corrective
• Upper line is declining, lower line is rising
• Wave E frequently overshoots the trendline and can also be a triangle
• Triangles only occur as a Wave 4/B/X/Y
• Never as a Wave 2/A
❗Triangles represent a continuation pattern for the dominant trend. Remember, continuation patterns are the main trend!
Chapter 3 Glossary:
3.1 Zig-Zag Waves
3.2 Flat Correction , Expanded Flat
3.3 Running Flat, Contracting Triangle
3.4 Barrier Triangle, Expanded Triangle
3.5 Double-Three
3.6 Triple-Three
-----
Running Flat
The is the last type flat correction: the running flat variation. It is the least common one, but has the same 3-3-5 structure. This one is hard to spot because a rising wedge is usually considered bearish for many and the last wave is where you will find the confirmation. For these, you want to trade the breakout.
Rules:
• Wave B ends above the beginning of wave A
• Wave C ends higher than the end of wave A
• Usually wave C is the same length as wave A.
→ This kind of correction happen in really strong and fast markets, especially Bitcoin. The fast and high push of wave B and the short wave C are signs of a strong primary trend.
A parallel channel regularly marks the low of
wave C, marked by the yellow lines!
Contracting Triangle
Triangles represent a balance and even pressure of buyers and sellers within the market. They contain five overlapping waves with a 3-3-3-3-3 structure. The contracting triangle represents the most frequently appearing.
Rules:
• Triangles have 5 Waves: A-B-C-D-E
• All of the waves are corrective
• Upper line is declining, lower line is rising
• Wave E frequently overshoots the trendline and can also be a triangle
• Triangles only occur as a Wave 4/B/X/Y
• Never as a Wave 2/A
❗Triangles represent a continuation pattern for the dominant trend. Remember, continuation patterns are the main trend!
Note
Elliot Waves Complete Guide | Chapter 1 - "The Overall Cycle"
Note
Elliot Waves Complete Guide | Chapter 2.1 - "Motive Waves"
Note
Elliot Waves Complete Guide | Chapter 2.2 - "Ending Diagonal"
Note
Elliot Waves Complete Guide | Chapter 2.3 - "Extensions"
Note
Elliot Waves Complete Guide | Chapter 3.1 - "Corrective Waves"
Note
Elliot Waves Complete Guide | Chapter 3.2 - "Flat-Expanded Flat"
🌎 Telegram | t.me/xforceglobal
📢 Twitter | twitter.com/XForceGlobal
🎥 YouTube | youtube.com/c/XForceGlobal
📢 Twitter | twitter.com/XForceGlobal
🎥 YouTube | youtube.com/c/XForceGlobal
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.