Technical Learnings: Neutral Triangles

Triangles are most commonly occurring technical patterns yet they are neglected the most. Its relatively easier to detect triangle pattern and usually they appear during the last leg ( 5th wave). Waves are usually overlapping and thrust/movement once the triangle pattern is complete is usually unidirectional and one sided thus making it easier to trade.

Neutral Triangle




Neutral Triangles

Just like all triangles Neutral Triangles has five legs too ( just like an normal impulse) but below are some of the important things to note.

• The most important characteristic of neutral triangle is that wave 'C' is the longest among directional wave ( i.e. wave A C & E) 
• Wave 'D' is always bigger than wave 'B'
• Wave 'D' may or may not surpass end point of  'B' (in the above example its surpassing but its not mandatory)
• Wave 'E' can be longer or shorter than wave 'A' (usually similar to  wave 'A' in terms of price and time)
• Once the Wave 'E' is retraced (in faster time) it can be assumed that trend has changed and long/short position can be taken with  a SL at end point of D wave (or beginning of E)