We have previously discussed double combinations when it comes to using corrective waves in technical chart analysis. We also mentioned just how useful they can be in making binary options trades. A close cousin of the double combination, the triple combination, can represent an even more powerful use of corrective waves.
Why is looking at triple combinations a powerful tool for making trading decisions? It’s because the price of an asset spends most of its time in consolidation, the analysis of the triple combination helps to reveal where the price will break out and that in turn, this will help you determine which side of the market you want to be on.
But before you get too excited about them, remember they are one of the most difficult patterns contained in Elliot’s wave theory to use.
Triple combination patterns are best used by picking out the contracting triangle at the end of the move. What makes them tough to identify and use is that they do not always end in a contracting triangle, but they are still there. They sometimes end with flats or zig-zags, so watch for this.
The triple combination pattern helps you trade by giving you clues as to when a price move will end. For a while it will look like the price move is channeling all too well. Even though there are signs of a perfect channel, it does not always indicate that there is an impulsive move if the inner corrections on the inside of the channel are the same. Once you have confirmation of the triangle, then the corrective move is identified and ready to be taken into consideration for trading.
Start trading now by opening a FREE account on one of our recommended brokers.