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The figure to the right shows what a symmetrical triangle looks like in a bull market. The symmetrical 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 A 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 symmetrical triangle, the shape of the pattern follows two converging trendlines, shown here as red lines.
A symmetrical 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.
On rare occasions, a symmetrical triangle can nest inside a symmetrical triangle. You see this when the wave count exceeds the A-B-C-D-E format,
forming a nine wave pattern.
Also, Frost and Prechter say that when price reaches the apex of the triangle, expect the market to turn.
For more information on non-Elliott patterns, visit symmetrical triangles.
Rules
The symmetrical 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 symmetrical triangle (A-B-C-D-E), unless extended.
- 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.
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