Question of the Week: 4/14/2015
In a contracting triangle, can the e-leg be larger in price than the d-leg?
The rules that make up a contracting Triangle are as follows...
1. Wave-a must be the longest in price of waves-a, c & e
2. Wave-e must be the shortest in price of waves-a, c & e
3. Wave-d must alternate in multiple ways to wave-b (price or time or complexity or structure)
4. Wave-d must trade at least part of the time in the same price range as wave-b
If the above rules are met, even if wave-e is longer than wave-d, then a contracting Triangle may be forming.
Click here to view NEoWave's Question Of The Week archive