I see a ton of incorrect drawings, all with the same error in their trend lines. They are drawing this coiling pattern as a contracting triangle, beginning their trend line from the ATH.
This is incorrect, and the breakout is in the opposite direction of what the true pattern is.
The zigzag is the only pattern that begins with a five-wave structure. It is only one leg of three. If a correction looks like a contracting triangle, but the first swing is a clear five-wave pattern, you are creating a zigzag. Do not label the first swing in a coiling pattern as wave [a/i] within the pattern, no exceptions.
None of the waves defining a triangle can be a five wave pattern that stands alone.
So we begin our trend line at the top of the first leg, shown in orange.. It's here that our contracting triangle begins, and we can see that every wave within the structure is a 3 wave structure, and never a 5 wave structure.
The wave c on the second leg of the structure will take the longest. There can be different ending patterns to the last legs, like an expanding flat, and wave C coming out of the triangle usually makes a zig zag also.
Thanks for the info... So the Orange wave is the correct one?
Clandestine_Xenophile
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@B1ockBui1der,
Yes, the Orange is the micro-structure, where we correctly begin our contracting triangle, with the Red being the overall structure and breakout to the downside. If we started the wave from the ATH the expected breakout is to the upside.