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.

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