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How to trade the Elliott wave triangle correction?
Triangles seem very easy to trade but act differently when it comes to trading.
#Elliottwaves have a very important, genuine, consolidated and beautiful pattern that is #triangle correction.
The structure of the triangle is 3,3,3,3,3. It means the triangle has 5 waves in it and each wave is sub-divided into 3 waves which we call (a,b,c,d,e). After 5 waves the triangle should have to burst out in the direction of the main trend. In a special case, when a limiting triangle occurs, it made 9 waves all of 3 sub-waves. i.e. 3,3,3,3,3,3,3,3,3.
An Elliottician thinks that it is easy to judge when the triangle finishes its 5 waves and we can play a move along with the trend. But ain't that easy. Most of the time, two types of problems a trader faces while dealing with the triangle.
A good trader is one who doesn't lose patience and sees the triangle bursting before its actual ending. With this false wave count, sometimes a trader's stop-loss doesn't get hit, but it takes too much time to actually complete the triangle. So, for an option buyer, this false illusion can be a death to the trade as all the premium will decay if he enters too early in the triangle.
Now, the first leg i.e. wave A of Zigzag is also a 3 wave move. So, it is difficult to make sure if the whole move is a triangle or if the triangle is in wave B of Zigzag.
So, the best way to trade a triangle is to be patient first of all, and trade only when the price breaks out from wave D. It will save a lot of your time and money. The technical analysis is all about the Price and Time as well.
Happy Trading!
#Elliottwaves have a very important, genuine, consolidated and beautiful pattern that is #triangle correction.
The structure of the triangle is 3,3,3,3,3. It means the triangle has 5 waves in it and each wave is sub-divided into 3 waves which we call (a,b,c,d,e). After 5 waves the triangle should have to burst out in the direction of the main trend. In a special case, when a limiting triangle occurs, it made 9 waves all of 3 sub-waves. i.e. 3,3,3,3,3,3,3,3,3.
An Elliottician thinks that it is easy to judge when the triangle finishes its 5 waves and we can play a move along with the trend. But ain't that easy. Most of the time, two types of problems a trader faces while dealing with the triangle.
A good trader is one who doesn't lose patience and sees the triangle bursting before its actual ending. With this false wave count, sometimes a trader's stop-loss doesn't get hit, but it takes too much time to actually complete the triangle. So, for an option buyer, this false illusion can be a death to the trade as all the premium will decay if he enters too early in the triangle.
Now, the first leg i.e. wave A of Zigzag is also a 3 wave move. So, it is difficult to make sure if the whole move is a triangle or if the triangle is in wave B of Zigzag.
So, the best way to trade a triangle is to be patient first of all, and trade only when the price breaks out from wave D. It will save a lot of your time and money. The technical analysis is all about the Price and Time as well.
Happy Trading!
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