I highlighted the sweet zone clearly. Just missed it for few pips.
- #62
- Mar 4, 2017 5:33pm Mar 4, 2017 5:33pm
- Joined Aug 2013 | Status: Trader | 4,894 Posts
{quote} I see the sweet zone you have drawn and it looks good but price didn't quite reach it. If it had we would have gotten an entry. Good job!
If you look at that daily CHF/JPY set up it shows very nice symmetry. AB = 7 CANDLES CD = 6 CANDLES.
For price to have reached the completion on candle 7, 8 or even 9, it would have had to entirely break through the bottom extension line XB of the sweet zone, which to my mind would invalidate the structure. Like I said, this is still a work in progress and these are excellent talking points. Also, this IS the daily so it is reasonable to expect that the AB=CD won't be exact. This trade is very similar to the NU daily I posted (post#3).
On the flip side, this is a good scenario for our earlier discussion about entering after the reversal. In hindsight of course, but entering after the reversal on the TDI cross would have worked out well. Again, the AB=CD was put in place to try and mitigate risk. In this case, based on the price hitting XB, in would be acceptable to scale in at the 161FIB (which happens to be near the testing of the 200EMA). A quick look at Bollinger bands shows price had pierced the bottom level as well. We certainly dont want to force any trade but in this instance there may have been other factors to consider other than ABCD.
Just my rant, off to the movies, back tonight
Pride always comes before destruction.... -Proverbs 16:18
- #63
- Mar 4, 2017 5:35pm Mar 4, 2017 5:35pm
- Joined Aug 2013 | Status: Trader | 4,894 Posts
Pride always comes before destruction.... -Proverbs 16:18
{quote} It's important to remember that the AB=CD doesn't have to necessarily complete to validate an entry. I map it out just to know where it is, and to see if it is going to show confluence with the structure as a whole. In fact, It may be in Bill Wolfe's course but he never mentioned it in the pdf overview. Also, I have never seen anyone else mention the AB=CD as an entry requirement, it was just something I added as a potential filter. If you look at that daily CHF/JPY set up it shows very nice symmetry. AB = 7 CANDLES CD = 6 CANDLES. For price...
I thought that we wanted all of those details - 1-4 line extension, fib and AB=CD to line up in order to take a trade? But we are okay only if two of them line up? Or it's a matter of "feeling" that us WW beginners haven't quite gotten the hang of yet?
Take care and enjoy the movie!
- #70
- Edited Mar 5, 2017 1:53am Mar 4, 2017 9:41pm | Edited Mar 5, 2017 1:53am
- | Joined Jun 2012 | Status: Analyst | 3,688 Posts
- #72
- Edited 1:16am Mar 5, 2017 1:04am | Edited 1:16am
- | Joined Jun 2012 | Status: Analyst | 3,688 Posts
- #74
- Mar 5, 2017 1:28am Mar 5, 2017 1:28am
- Joined Aug 2013 | Status: Trader | 4,894 Posts
Hi Expo33 A big thank you for starting this thread. Do you ever use the fib ratios for AB=CD completion? For example, if AB retraces 61.8 then completion is 161 extension etc.....also I don't recall any time or pip distance being mentioned in Scott carney's material on AB=CD, maybe you can elaborate on this and also on what has to happen for the structure to invalidate. You posted a developing GbpJpy 1hr chart last week somewhere but it kinda fizzled out i think, maybe use that as example to show if still valid or not. Once again thanks for all...
To your first question, no I haven't actively considered anything like that, but like I have said, this is still a work in progress. The possibilities are only limited by our imagination. One of the reasons I fell in love with WWs is their simplicity, so for now I am focused on honing my WW skills. However, I am huge fan of Scott Carney's work and have looked at more harmonic structures than my brain can handle.
The GPY/JPY you mentioned totally broke down be fore D. No problem, we just scrub that chart and look for more developing D legs. Map it out, monitor price action, be prepared to strike. Rinse and repeat.
Here is the chart you were talking about. Price breaks down badly. BUT, if you redraw the AC trend line as it stands now, the structure is still technically a valid WW. However, the symmetry is a complete train wreck and not something I would look to trade even if price made it to D
GPY/JPY HOURLY
Pride always comes before destruction.... -Proverbs 16:18
- #75
- Mar 5, 2017 1:46am Mar 5, 2017 1:46am
- Joined Aug 2013 | Status: Trader | 4,894 Posts
{quote} Great response, I love how much effort you put into explaining every little detail. So basically the structure, meaning that the AB=CD in terms of time, is more important than price hitting to the exact pip? I thought that we wanted all of those details - 1-4 line extension, fib and AB=CD to line up in order to take a trade? But we are okay only if two of them line up? Or it's a matter of "feeling" that us WW beginners haven't quite gotten the hang of yet?
The definitive characteristic of this wave is how flat it is. Notice XB is almost horizontal and given that AB was a swift and smooth 7 candle move it negates any possibility of CD completing with symmetry inside the sweet zone. The only way CD can complete is to slowly ride down the extension line, in which case there could be no symmetry with AB.
Basically we are on the verge of the a parallel Wolfe wave (PWW), which I intentionally left out for now just because it brings in a whole other set of entry strategies. Honestly, I am still studying the PWWs. Hopefully later on that is something we can get into, but for now just trying to master the classic wave.
Remember, mechanically speaking the sweet zone is anywhere from the XB trend line to the AC parallel extension line. Entry strategies are subjective and vary greatly form one trader to the next.
Pride always comes before destruction.... -Proverbs 16:18
hello!! great work!! what do you think about this example?? {image} {image}
I have circled what I mean with the fibonacci in the picture below
yes, you are right, i have drawn the fibo in a wrong way, how do you manage this trade? do you wait till the end? this trade has a huge r:r
EXIT STRATEGY
Every good entry needs a good exit. Below is my mechanical exit strategy ( I like to divide my positions up into 3 equal parts). I use the X, C, and A points as my reference points for exit. It is likely that there will be an increase in price action at these points just based on the nature of S/R. I would actually be setting my TP levels 5-20 pips below these three levels based on the time frame. I am generally very conservative with my TP's. I don't want to set my TP right at the level only to see price reverse significantly without bagging some pips.
Note: When price reaches TP #1 just shy of level X, then the SL's for the two remaining positions are moved to BE.
In regards to your specific pattern I would most likely take the final profit at around 1:6RR as the 1-4 line is very steep
