If leading diagonals are to be met at the beginning of an impulsive move as the first wave or at the beginning of a correction, as the a wave, in the case of an ending diagonal, these structures are to be met almost exclusively as being the last part of an impulsive move, or the fifth wave.
Very often an ending diagonal resembles with a wedge pattern, a rising one is the diagonal is moving to the upside and a falling one if the diagonal is moving to the downside.
In order the categorize a certain five waves structure as being an ending diagonal the following rules need to be respected:
- the first wave of an ending diagonal must be a zig-zag;
- the second wave of and ending diagonal may be any corrective pattern except a triangle;
- the third wave must be a zig-zag family pattern;
- the fourth wave of an ending diagonal may be any corrective pattern;
- the fifth wave must be a zig-zag family pattern;
- the third wave is always bigger than the second wave;
- the fifth wave must be bigger than 80% of the fourth wave;
the fifth wave is never the longest when compared with all the waves in the ending diagonal.
In other words if you are having in front of your eyes a price structure and you look at it as being a possible ending diagonal then consider it to be in the form of 3-3-3-3-3 as all waves should come in the form of threes (being made up by three waves of a smaller degree, or combination of three waves structures of smaller degree).
The recordings that come with this chapter will have a couple of examples of such a pattern and will look at all the rules to be respected.