According to The Elliott Wave Theory, a barrier triangle is a chart pattern that forms when the market is consolidating, or moving sideways, and price is trapped between two converging trendlines. The pattern is named "barrier triangle" because the two trendlines act as a barrier that prevents price from breaking out in either direction.
The barrier triangle is usually considered a continuation pattern, which means that it signals a pause in the current trend rather than a reversal. After the formation of a barrier triangle, price is expected to break out in the direction of the previous trend once the pattern is complete.
There are two types of barrier triangles: ascending and descending. An ascending barrier triangle is formed when the lower trendline is ascending and the upper trendline is horizontal, while a descending barrier triangle is formed when the upper trendline is descending and the lower trendline is horizontal.
The Elliott Wave Theory states that the barrier triangle is composed of five subwaves, labeled A-B-C-D-E. The subwaves A and C are impulsive waves, while subwaves B and D are corrective waves. The final subwave E is typically a small impulse wave that completes the triangle pattern.
A barrier triangle can be defined according to some criteria:
Status:: #wiki/notes/mature
Plantations:: Elliott Wave Theory - 20230221100113
References:: The Elliott Wave Principle