Progress labels in zigzags, contracting, non-limiting, 

and all types of

expanding triangles

Dear Friends!

To keep the presentations concise, I will remind you of the types of triangles once
again:

Contracting triangles:
 Limiting
o horizontal triangles;

o irregular triangles;

o running triangles.

 Non-Limiting

Expanding triangles:
 Limiting
o horizontal triangles;

o irregular triangles;

o running triangles.

 Non-Limiting

I covered each type of triangles in detail in Part 14.

In the previous training article, I covered the progress labels for contracting limiting
triangles. In this article, I will finish explaining progress labels and deal with
contracting non-limiting triangles and expanding triangles. I will also explain the
application of progress labels to zigzags. As a bonus, I will describe three extra
corrective patterns, which Glenn Neely discovered after he had published his book
Mastering Elliott Wave.

Like in the previous educational article, I suggest you find the example of all
patterns described in the article yourself and put progress labels in the price chart
of any trading instrument. This is a very useful skill for a trader to be able to
discover patterns and correctly interpret them for any trading instrument. The
research data can be found on the LiteForex platform.
If you are not familiar with the NeoWave theory, I recommend you to read all the
articles, starting from the first one, in the NeoWave series based on Glenn Neely’s
book Mastering Elliott Waves.

Neo Wave theory. Part 1. Rules for creating charts.

Neo Wave theory. Part 2. Basic information on Polywaves and Structure Labels.  

NeoWave. Part 3. Retracement Rule 1.

NeoWave theory. Part 4. Retracement Rule 2.

NeoWave theory. Part 5. Retracement Rule 3.

NeoWave. Part 6. Retracement rule 4. Conditions “a” and “b”.

NeoWave. Part 7. Retracement rule 4. Conditions “c”, “d” and “e”.

NeoWave. Part 8. Retracement rule 5. Conditions “a” and “b”.

NeoWave. Part 9. Retracement rule 5. Retracement rule 6, condition “a”.

NeoWave. Part 10. Retracement Rule 6. Conditions “b”, “c”, and “d”.

NeoWave. Part 11. Retracement rule 7.

NeoWave. Part 12. Impulsions and the rules to analyze impulse wave patterns.  

NeoWave. Part 13. Corrections. Rules to identify a correction.

NeoWave. Part 14. Triangles. Rules to identify triangles.

NeoWave. Part 15. Basic and advanced rules of logic to analyze triangles.

NeoWave. Part 16. Extended rules of logic for Flats and Zigzags.

NeoWave. Part 17. Extended rules of logic for complex corrective patterns.  

NeoWave. Part 18. Rules of complexity and balance. Compaction procedures.

Power ratings.

NeoWave. Part 19. Progress labels applied in trending impulses.

NeoWave. Part 20. Application of progress labels to terminal impulses.

NeoWave. Part 21. Channeling in impulses and Fibonacci relationships.

NeoWave. Part 22. Progress labels in flat corrections.

NeoWave. Part 23. Progress labels in triangles.

General rules for progress labels in Non-Limiting Triangles.

Non-Limiting triangles often occur as an X-wave at the end of complex corrections.

Besides, they could be the (E) wave within a larger triangle. The most accurate
signal confirming that there is forming a non-limiting triangle is when the market
contracts right into the apex of the converging trendlines (within 20% of the entire
triangle). Any non-limiting triangle, except when it occurs as an X-wave, usually
concludes the phase of a larger correction. You can learn more about non-limiting
triangles in Part 14.

I should note that non-limiting triangles obey the same rules as irregular non-
limiting triangles, and they also should meet some requirements that are presented
below:
The most common positions to occur:

1. Wave (E) in the horizontal triangle

2. The last phase of the double or triple three, double or triple combination,
and also a running double three.

3. Wave 5 in a terminal impulse

4. Wave (X) in a complex correction

Progress labels for wave (A) in a non-limiting triangle

In non-limiting triangles, wave (A) is commonly the most violent segment of the
triangle. (so that it covers the most price distance in the shortest period of time). If
wave (A) isviolent, then wave (B) should break down into a much more complex and
slower developing wave.
The chart roughly outlines a triangle. As the end of wave (E) falls into the last 20% of
the entire triangle added to its apex point, this is a non-limiting triangle. By the way,
wave (A) in this pattern features the most violent price action compared to other
segments.

Progress labels foe wave (E) in complex triangles of all types.

Wave (E) in a complex triangle is often a non-limiting triangle.

Progress labels in an Expanding Triangles

There are many rules that must be observed in an expanding triangle. You can read
about them in part 14. In this article, I will deal with progress labels to different
types of expanding triangles.

General rules to apply progress labels to Expanding Limiting Triangles

The expanding limiting triangle can be the fourth wave in an impulse or the (B)
wave in a correction. If it is the (B) wave, it can only be a part of a flat. The
expanding limiting triangles have the following characteristics:
 Waves (A) and (E) will usually relate by 161.8% (wave (E) is larger of the two).
 Wave (A) or wave (B) will be the shortest segment if the triangle.

 Wave (B) or wave (D) can fail, that is to exceed the end of the previous wave.
Progress labels for an expanding horizontal triangle

 Wave-a is the smallest segment or the Triangle.

 There are no failures in a horizontal triangle.

 Wave (E) should be the most violent, complex, and time-consuming pattern
of the group.

The above chart schematically outlines an example of the expanding limiting

horizontal triangle marked with the above progress labels.

Progress labels for an expanding irregular triangle

 Wave (B) is a failure.

 Waves (A) and (E) are likely to relate by 161.8%.
The above chart schematically displays the progress labels, described above, typical
for an expanding limiting irregular triangle. Wave (B), a part of the irregular triangle,
is a failure as it doesn’t reach the high of the previous wave. Wave (E) is 161.8% of
wave (A).

Progress labels for an expanding running triangle

 Wave (D) is a failure.

 Waves (A) and (E) often relate by 261.8%.
The above chart displays an expanding running triangle with the typical progress
labels. Wave (D) is a failure as it fails to reach the beginning of wave (C). Wave (E) is
261.8% of wave (A).

General rules for progress labels in a Non-Limiting Expanding Triangles

Non-Limiting Expanding Triangles should basically follow the same parameters as

limiting expanding triangles. However, in addition to the basic rules covered in part
14, there are a few differences that need to be covered. In a non-limiting triangle,
the chances are good that no Fibonacci relationships will be present between its
segments. The only acceptable relationship can be between wave (A) and (E). Wave
(E) would be 261.8% of wave (A).

Here, I am going to finish covering progress labels applied to triangles. Now, I shall
move on to progress labels applied to zigzags to finish describing advanced
progress labels developed by Glenn Neely.

Progress labels in zigzags

Remember, progress labels are the letters A, B, C that mark waves within a zigzag.
Unlike flat corrections, covered in part 22, zigzags do not have so many variations,
but they must follow stricter rules. Below, I will explain the typical features of
zigzags depending on the waves analyzed within the pattern.
Progress labels for wave (A) in a zigzag

The first wave of the zigzag has the following characteristics:

 Wave (A) must be an impulse structure
 Wave (A) should not be retraced by wave (B) by more than 61.8%

 In cases, when the (A) wave is impulsive, but the (B) wave retraces more than
61.8%, then that retracement will only be the sub-wave (A) (of one smaller
degree) of wave (B). The sub-wave (C) of wave (B) will fail.

 If part of the B-wave retraces 81% or more of wave (A), then you should
recheck your analysis of wave (A). It will most likely fall under the missing
wave rule in which wave (A) (that at a glance only looked impulsive) is likely to
be a corrective double zigzag or double combination.

Let us see the application of the progress rules on an example.

The above chart displays a typical example of a polywave zigzag (that is composed
of the sequences of simpler waves). Note that its wave (A) is impulsive, it is a five-
wave sequence, whose waves are marked with the green lines, wave (B) retraces
61.8% of wave (A).

Progress labels for wave (B) in a zigzag

Wave (B) in a zigzag must observe the following rules:

  Wave (B) of a complex zigzag must be corrective. However, it can’t be a
running correction unless the zigzag, of which the (B) wave is a part, is in a
triangle.
 Wave (B) can not be a double or a triple zigzag, a running double or triple flat,
or the combination of a zigzag and a flat.

Let us see the progress labels in the (B) wave on an example:

Wave (B) in this zigzag is also a zigzag, that is a correction. So, the rules of progress
labels for wave (B) are met.

Progress labels for wave (C) in a zigzag

Wave (C) in a zigzag must observe the following rules:

 When a zigzag is not part of a triangle (of only one or two higher degrees),
the length of wave (C) should fall between 61.8% and 161.8% of wave (A).
 If the whole zigzag is part of a triangle, the (C) wave can be 161.8% or more of
wave (A).

 If wave C is more than 161.8% of wave (A), the zigzag will probably be a part
of a triangle.

Let us see how the above rules work on an example:

The above chart displays a zigzag. Wave (C) is more than 161.8% of wave (A).
Therefore, it must be a part of a triangle of one or two higher degrees. Let us see if
this signal will work out.

The zigzag we analyzed is the (A) wave of a contracting triangle of one higher
degree.
Bonus. Extra corrective patterns discovered by Neely: Diametric
Formation, Neutral Triangle, Extracting Triangle.

In Part 21 devoted to impulse patterns, I already wrote about two extra impulse
patterns that Glenn Neely discovered after Mastering Elliott Wave had been
published. Now, I want to cover a few extra corrective patterns. I should note that
these patterns are extremely rare, so it is hard to find them in the real market. I
present schematically drawn charts, but I will be happy if you try to discover them
in the chart of any trading instrument. Share your discoveries in the comments, I
will be glad to look at them and give my comments.

Diametric Formation

Neely discovered this pattern in 1991. At an early stage of its formation, the pattern
looked like a contracting triangle, however, when the (D) completed, the behavior
changed. Wave (E) was extremely long, and there formed two zigzag-shaped waves
following wave (E) within a new formation. As a result, there is a pattern that could
resemble a look of a bowtie.

Note that the first series in the Diametric Formation develops like a contracting
triangle, but the second series unfolds as in an unusual for a triangle way. For
example, wave (E) goes far beyond the triangle channel, it is followed by a strong
zigzag-shaped retracement, which followed by another retracement that is greater
in price. Unfortunately, I haven’t found any information on the wave relations or
progress labels within a pattern. You find any additional information about the
NeoWave Diametric, please share your discoveries in the comments.

Neutral Triangle

This pattern explains the triangle corrective patterns that were not understood
earlier. Neely interprets the neutral triangle as a transition pattern between
impulsions and corrections. Accordingly, it combines the features of an impulse and
a correction.

In general, a neutral triangle follows the same rules that are relevant for the usual
triangles, but there is one exception. Like in an impulse, it has an extended wave 3
or wave (C), which is the greatest and the most time-consuming among the first
three waves (A), (B) and (C). Wave (D) is also quite big compared to other waves. In
some cases, wave (D) can even exceed wave (C) in price, but it is almost always less
time-consuming.

The chart schematically outlines a neutral triangle. It is clear that wave (C) is the
most time-consuming. Wave (D) retraces a little more than 100% of wave (C). Note
that the trendlines in this pattern are drawn across the ends of waves (B) and (D),
and waves (A) and (E), that is the end of wave (C) is not taken into account.

Extracting Triangle
The unique aspect of this Triangular sub-category is that the alternation that is
normally present in a Triangle (based on which wave is the longest) is reversed. This
creates a very strange looking formation that can be very difficult to spot or
interpret. If you manage to discover one in a real price chart, please, do share in the
comments! The only early warning behavior characteristic that Neely has found
relates to wave (B). If wave (B) is much shorter than wave (A) and takes less time
than waves (A) and (C) and looks like a zigzag, an extracting triangle is likely to be
unfolding.

Extracting triangles usually emerge in the market of a neutral shift. So, the pattern
is generally followed by a weaker impulse than that after a contracting triangle, but
it is still stronger than the thrust out of an expanding triangle.

Let us analyze this pattern in the example. It is clear from the above chart that
waves (A), (C), and (E) continuously contract in price from left to right. Besides,
waves (B) and (D) subsequently expand. Also, note that wave (B) is the shortest in
the pattern. Besides, the (B) wave looks like a zigzag and consumes less time than
other segments in the extracting triangle.

That is all for today. Apply these techniques in practice and test everything in
trading. The LiteForex functions are more than enough for this. If you haven’t yet
chosen your broker, it’s high time you started trading with LiteForex. Besides, there
is a wonderful opportunity to win a dream house, a brand new car, and cool Apple
gadgets in the dream draw with the total prize fund of 350 000 USD.
In the next educational article, I will deal with channeling techniques and advanced
Fibonacci relations. I wish you good luck and good profits!

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Price chart of BTCUSD in real time mode

Periods
 M1
 M5

 M15

 M30

 H1

 H4

 D1
  W1

Zoom1D1W1M3M6M1YALL30. Nov14. Dec28. Dec11. Jan25. JanDec '20Jan '21F…

15k20k25k30k35k40k45k

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provision of investment advice for the purposes of Directive 2004/39/EC.
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WRITTEN BY
Mikhail Hypov
Investment analyst and independent trader

What should I read next?

01 Jun. 2020 15:42

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