Ending Diagonal (ED) waves model
An Ending Diagonal is a triangular pattern with an internal wave structure of 3-3-3-3-3.
The Ending Diagonal pattern is a type of diagonal wave that commonly occurs in the final waves of a wave degree, such as wave 5 or wave C. It should not be confused with corrective triangle patterns.
The Ending Diagonal pattern is relatively rare at larger wave degrees, often appearing at lower wave degrees on intraday price charts. Typically, the Ending Diagonal pattern is followed by a significant trend reversal in the market.
Principles:
- The waves within an Ending Diagonal (ED) pattern, namely waves 1, 3, and 5, always follow the Zigzag (ZZ) pattern family.
- Wave 2 can take on any corrective pattern except for contracting triangles (CT) and expanding triangles (ET).
- Wave 2 should never exceed the price level of wave 1.
- Wave 3 is always larger in price than wave 2.
- Wave 4 can take on any corrective pattern.
- Waves 2 and 4 must overlap in terms of price, meaning they should cross each other.
- Wave 5 must be at least 50% of the price distance covered by wave 4.
- Wave 3 is not necessarily the shortest in price when compared to waves 1 and 5.
The Ending Diagonal (ED) pattern has two forms:
Ending Diagonal Contracting and Ending Diagonal Expanding.
In the Ending Diagonal Contracting pattern, the trendlines connecting the endpoints of waves 1 and 3, and waves 2 and 4, tend to converge.
In the Ending Diagonal Expanding pattern, the trendlines connecting the endpoints of waves 1 and 3, and waves 2 and 4, tend to diverge.
Leading Diagonal (LD) waves model
Leading Diagonal is a triangular pattern with an internal wave structure of 5-3-5-3-5.
The Leading Diagonal pattern typically occurs at the beginning of a wave degree, such as wave 1 or wave A. In other words, it is within wave 1 or wave A. It should not be confused with corrective triangle patterns. The key difference between this pattern and the Ending Diagonal pattern is that waves 1, 3, and 5 have an internal wave structure of 5 waves, not 3 waves as in the Ending Diagonal pattern.
Similar to the Ending Diagonal pattern, the Leading Diagonal pattern is relatively rare at larger wave degrees and tends to appear more often at lower wave degrees on intraday price charts. Typically, significant trend changes follow the occurrence of a Leading Diagonal pattern.
Principles:
- Wave 1 of the Leading Diagonal (LD) pattern follows the Impulse (IM) or Leading Diagonal (LD) pattern.
- Wave 2 can follow any corrective pattern except for contracting triangle (CT) and expanding triangle (ET) patterns.
- Wave 2 never exceeds wave 1 in terms of price.
- Wave 3 of the Leading Diagonal (LD) pattern follows the Impulse (IM) pattern.
- Wave 3 is always larger in price than wave 2.
- Wave 4 can follow any corrective pattern.
- Waves 2 and 4 must share the same price range, meaning they must overlap.
- Wave 5 of the Leading Diagonal (LD) pattern follows the Impulse (IM) or Ending Diagonal (ED) pattern.
- Wave 5 must be at least 50% of wave 4 in terms of price.
- Wave 3 is not the shortest wave in terms of price when compared to waves 1 and 5.
The Leading Diagonal (LD) pattern has 2 forms:
Leading Diagonal Contracting and Leading Diagonal Expanding.
With the Leading Diagonal Contracting pattern, the trendlines connecting the endpoints of waves 1 to 3 and waves 2 to 4 tend to converge.
With the Leading Diagonal Expanding pattern, the trendlines connecting the endpoints of waves 1 to 3 and waves 2 to 4 tend to diverge.
| You have already read about Diagonal Wave I will share with you in next article: Corrective wave For reviewing the last part: Impulse Wave |
