Bulkowski’s Symmetrical Triangle

Written and copyright © 2008-2010 by Thomas N. Bulkowski. All rights reserved.

This page describes the symmetrical triangle pattern of the Elliott wave principle, how price moves not in a straight line but in a series of rises and retracements.

The running triangle is very close to the symmetrical triangle. Click the link for more information.

The figure to the right shows what a symmetrical triangle looks like in a bull market. The symmetrical triangle is a region of horizontal price movement, a consolidation of a prior move, and it is composed of "threes." That means each of the A-B-C-D-E waves have three subwaves. I labeled the A subwaves with red numbers, 1, 2, and 3, as an example. Expect volume and volatility to recede as the pattern moves toward the breakout, but this is not a requirement.

In a symmetrical triangle, the shape of the pattern follows two converging trendlines, shown here as red lines.

A symmetrical triangle in a bear market is an inverted picture of a bull market triangle. The price action swings from trendline to trendline, and converges. The A-B-C-D-E waves subdivide into threes, forming a 3-3-3-3-3 configuration.

On rare occasions, a symmetrical triangle can nest inside a symmetrical triangle. You see this when the wave count exceeds the A-B-C-D-E format, forming a nine wave pattern. Also, Frost and Prechter say that when price reaches the apex of the triangle, expect the market to turn.

Rules

The symmetrical triangle has rules that govern its shape. They are listed here.

• The waves bottom and top out following two converging trendlines.
• Five waves compose the symmetrical triangle (A-B-C-D-E), unless extended.
• Each of the A-B-C-D-E waves are composed of three subwaves, so it has a 3-3-3-3-3 configuration.
• Volume and volatility tend to recede over the life of the pattern, but this is not a requirement.

-- Thomas Bulkowski

Copyright © 2008-2010 by Thomas N. Bulkowski. All rights reserved. Errors have been made. Others will be blamed.