Triangles signal an impending thrust in the direction of the larger trend. The thrust target is approximately equal to the widest part of the triangle.
Description
When a triangle (contracting or barrier) is identified, the key trading opportunity is the thrust that follows its completion. The thrust moves in the direction of the prior trend and typically covers a distance equal to the widest part of the triangle (the A wave height). Triangles occur as wave 4 or wave B, so the thrust is wave 5 or wave C.
Key Points
- Triangle thrust direction: in the direction of the larger trend (wave 5 after a wave 4 triangle; wave C after a wave B triangle)
- Thrust target: approximately equal to the widest span of the triangle (from wave A start to wave B end)
- Entry: as the E wave of the triangle completes, enter in the thrust direction
- Stop-loss: beyond the E wave (a move beyond E invalidates the triangle count)
- The thrust after a triangle is often sharp and swift — triangle is a powerful setup
