The Long Investor

Lesson 4 - Part C

Added 2023-11-04 19:29:09 +0000 UTC

Ending Diagonal (3-3-3-3-3)

What is an Ending Diagonal?

Ending diagonal is a motive wave that occurs in the 5th Wave of the impulse waves or the final position of a C wave in a corrective sequence (A-B-C). It signifies the exhaustion of the larger prevailing trend.

Some of the Characteristics of an Ending Diagonal wave:

Wave Structure: An ending diagonal consists of five sub-waves, which are structured in a 3-3-3-3-3 pattern. This means each of the five sub-waves of the diagonal itself subdivides into a smaller three-wave pattern.
Converging Trendlines: The sub-waves of the diagonal tend to be contained within two converging trendlines. These trendlines give the pattern a wedge shape, which is broader at the beginning and narrows towards the end.
Wave Overlap: Unlike in a typical impulse wave, one of the distinctive features of an ending diagonal is that the fourth wave often overlaps the territory of the first wave. This is a violation of the rule in a standard impulse wave but is acceptable within an ending diagonal.

TIP: The easiest way to spot the Ending Diagonal on a blank chart would be to look out for a Wedge Pattern. Wedge Patterns appear at the ending stages of the trend, and that is usually where you can spot 5 waves with 4 sub-waves within.

Ending Diagonal Rules:

- Rule # 1 - Wave 2 never falls below the starting point of Wave 1.

- Rule # 2 - Wave 3 is often the longest wave, but never the shortest of the waves 1-3, and 5. Wave 3 can be shorter than wave 1 or wave 5, but can't be shorter than both.

- Rule # 3 - Wave 4 must end above the start of Wave 2.

___________________________

Lesson 5

We will be looking at the Corrective Phase.