Extracting Triangle: Extracting triangles are very important pattern, they do not occur very frequently and even the price action which follows once the pattern is complete is not very sharp.
Like all triangles they too have 5 legs can be found in both Bullish and Bearish markets.
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| Extracting Triangles |
Important characteristics
As the name suggests, extracting triangle 'extracts' the power of bulls and bears ( depending on what type of triangle it is). This pattern causes 'fatigue' among players and is a 'tiring' pattern. In case of Bearish pattern as you can see Bulls are trying to take market higher but are failing with each attempt. Each direction leg ( i.e up leg) is getting smaller and smaller meaning Bulls are losing their strength, however each falling leg is getting bigger meaning Bears are getting stronger. Once the E leg is done and inspite of all their efforts Bulls realizes that they have failed to take market to new highs, they give up and that's when Bears take over and market goes for a downtrend which can be quite extended at times. Bullish triangles works just the opposite of what we just discussed. Here Bears keep getting weaker and Bulls keep getting stronger and after E leg is done you see a fresh uptrend
What is the difference between extrating triangle and neutral triangle of neo eliot pattern.pls reply.what will be the level of c .
ReplyDeleteIn extracting triangle, C will always be smaller than A whereas in neutral triangle, C leg will be the biggest leg and E leg may or may not move beyond the end point of C.
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