by Bob Stokes
Updated: December 18, 2013
These days there's no shortage of books about trading. You could read for months before you find a book that applies to your trading style.
Senior Analyst and Elliott wave trader Jeffrey Kennedy compiled The Best of Trader's Classroom eBook specifically for Elliott wave traders.
Jeffrey had individuals like you in mind when he said:
I began my career as a small trader, so I know firsthand how hard it can be to get simple explanations of methods that consistently work. In more than 15 years as an analyst since my early trading days, I've learned many lessons, and I don't think that they should have to be learned the hard way.
Here is an edited excerpt from Jeffrey's eBook where he discusses corrective patterns, including the triangle formation:
Triangles are probably the easiest corrective wave pattern to identify, because prices simply trade sideways during these periods. [The graphic below] shows the different shapes triangles can take.
Triangles offer an important piece of forecasting information -- they only occur just prior to the final wave of a sequence. This is why triangles are strictly limited to the wave four, B or X positions. In other words, if you run into a triangle, you know the train is coming into the station.
[The chart below] shows a slight variation of a contracting triangle, called a running triangle. A running triangle occurs when wave B makes a new extreme beyond the origin of wave A. This type of corrective wave pattern occurs frequently in commodities.