Sunday, December 27, 2009

Technical Analysis Tutorials-Contracting Running Triangle

Running triangles are of two types. One is contracting running triangle and the other is expanding running triangle.

Contracting triangles normally occur before a big move in the upside.

Contracting triangles are followed by a straight line upmove or an expanding upmove.

Contracting triangle has five legs. The first leg is the most volatile and last leg is the least volatile leg. Normally, the final leg would taper off towards the end of the triangle.


Rising wedges are sometimes mistaken for running triangle. But both are different as far as the break out is concerned.

In a running triangle, the base line will not be violated. But in a rising wedge, the base line may be violated.