Triangle
A triangle is a five-wave sideways corrective pattern labeled A-B-C-D-E. Each sub-wave subdivides into three smaller waves, giving the entire pattern a 3-3-3-3-3 structure. Triangles come in three forms: contracting (converging trendlines), expanding (diverging trendlines), and running (Wave B exceeds Wave A's origin). They only appear in the Wave 4 or Wave B position. This rule is absolute. If you think you see a triangle in Wave 2, you are wrong. Triangles always precede the final wave of the larger pattern. After a triangle completes, expect one more push in the trend direction. The thrust out of a triangle is typically quick and roughly equal to the widest part of the triangle. Triangles are one of the most reliable patterns in Elliott Wave because they give you a clear setup: wait for Wave E to complete, then trade the thrust.
The S&P 500 enters a Wave 4 triangle. Wave A drops 100 points. Wave B rallies 80 points. Wave C drops 60 points. Wave D rallies 40 points. Wave E drops 30 points. The converging trendlines are clear. You enter long at the end of Wave E with a stop below the lower trendline. The thrust target is 100 points (the widest part of the triangle) above the breakout point. This setup has a defined risk and a measurable target, which is what makes triangles so tradeable.