Bulkowski’s Running Triangle

Written and copyright © 2008-2010 by Thomas N. Bulkowski. All rights reserved.

This page describes the running triangle pattern of the Elliott wave principle, how price moves not in a straight line but in a series of rises and retracements.

The figure to the right shows what a running triangle looks like in a bull market. The running triangle is a region of horizontal price movement, a consolidation of a prior move, and it is composed of "threes." That means each of the A-B-C-D-E waves have three subwaves. I labeled the B subwaves with red numbers, 1, 2, and 3, as an example. Expect volume and volatility to recede as the pattern moves toward the breakout, but this is not a requirement.

In a running triangle, the shape of the pattern follows two converging trendlines, shown here as red lines. Thus, it is a symmetrical triangle with one important difference. The start of the pattern shows the start of wave A falling short of the trendline. In other words, wave B runs well beyond the start of wave A, hence the name running triangle.

A running triangle in a bear market is an inverted picture of a bull market triangle. The price action swings from trendline to trendline, and converges. The A-B-C-D-E waves subdivide into threes, forming a 3-3-3-3-3 configuration. Again, wave B runs well beyond the start of wave A.

Frost and Prechter say that when price reaches the apex of the triangle, expect the market to turn.

Rules

The running triangle has rules that govern its shape. They are listed here.

• The waves bottom and top out following two converging trendlines.
• Five waves compose the running triangle (A-B-C-D-E).
• Wave B runs beyond the start of wave A.
• Each of the A-B-C-D-E waves are composed of three subwaves, so it has a 3-3-3-3-3 configuration.
• Volume and volatility tend to recede over the life of the pattern, but this is not a requirement.

-- Thomas Bulkowski

Copyright © 2008-2010 by Thomas N. Bulkowski. All rights reserved. It’s lonely at the top but you eat better.