A diagonal that appears as wave 1 of an impulse or wave A of a corrective pattern. Signals the start of a new trend. The 3-3-3-3-3 sub-wave structure is most common.
Description
A leading diagonal appears at the beginning of a new trend — as wave 1 of an impulse or wave A of a zigzag. It takes a wedge shape with overlapping waves 1 and 4. After a leading diagonal completes, the subsequent corrective wave (wave 2) often retraces deeply before the main trend resumes strongly in wave 3.
Key Points
- Position: wave 1 of an impulse, or wave A of a zigzag
- Sub-wave structure: usually 3-3-3-3-3 (each sub-wave is a 3-wave corrective structure)
- Waves 1 and 4 overlap
- After the leading diagonal (wave 1) completes, wave 2 often retraces 0.618–0.786 of wave 1
- The strong wave 3 that follows often reassures traders that the new trend is established
- Leading diagonals are less common than ending diagonals
