# Triangles Offer Traders Important Forecasting Information

By Elliott Wave International

The free 45-page eBook — The Best of Trader’s Classroom — is specifically for Elliott wave traders. This excellent eBook will save time and deliver the knowledge you want.

It’s written by Elliott wave trader Jeffrey Kennedy: He 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.

The Best of Trader’s Classroom offers 14 trading insights that you can use.

Consider these examples of what you’ll learn:

— Use bar patterns to spot trading setups
— Use the Wave Principle to set protective stops
— Identify Fibonacci retracements
— Apply Fibonacci ratios to real-world trading

Jeffrey also discusses corrective patterns, including the triangle formation. Here’s an edited excerpt:

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.

Jeffrey goes on to provide three real-world examples of the triangle price pattern. Here’s one of them with his accompanying commentary.

[The chart above] 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.