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Wolfe Waves - Get in the Zone

  • #601
  • Mar 30, 2017 3:49am Mar 30, 2017 3:49am
Here are a few charts which will help to explain a Wolfe Wave which happens to be part of a trading idea.
The first chart is a H1 of EURUSD. We can see the trend line from the 9th was broken on the 29th. We would usually expect a test of the trend extreme after a decent break of the trend line. We got the decent break of the trend line and there has been a reasonable tight bear channel from the trend extreme. At the moment it looks like support has been found at a prior signal bar high (circled) and also on another channel line dating back to the 22nd. This channel line also has the 1,3 and maybe the 5 point on it. The target line for the wave I am talking about is drawn in thick red.

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However, we don;t know if the market will reverse back up so I now want to identify a reversal on a lower time frame chart such as the 5min. As we can see, there is another Wolfe Wave possibility on this lower time frame.

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At the moment, although we can see a clear channel line across three lows, the last leg down was far too strong to think about going long. I would want to see a stronger break of the steep trend line followed by an attempt at bear trend resumption. I would be looking for a failure of the bear trend resumption at a support level, such as a signal bar high and maybe even a wedge bottom. I would then want a decent bull signal bar after the bulls have shown decent strength and that they may have the ability to take control over the market.
  • #602
  • Mar 30, 2017 4:00am Mar 30, 2017 4:00am
Been trading WWs for years. The secret is that the 'X' must be a new high or low. You can't have an X in mid price obscurity. WWs exist at the bottom and tops of moves and the best ones stand out -you shouldn't need an Indy to spot them!

The target price should, IMHO (and Linda Rache's) be the intersection of the line connecting points 1 & 4 of the wave where this meets the vertical point where the X-B; A-C line convergence joins.

Point 3 must be higher than 1 when looking at WW short and vice versa. The lines must converge to give the 'wedge' pattern
Trade less and become more profitable!
  • #603
  • Mar 30, 2017 4:26am Mar 30, 2017 4:26am
Quoting Grimweasel
Been trading WWs for years. The secret is that the 'X' must be a new high or low. You can't have an X in mid price obscurity. WWs exist at the bottom and tops of moves and the best ones stand out -you shouldn't need an Indy to spot them! The target price should, IMHO (and Linda Rache's) be the intersection of the line connecting points 1 & 4 of the wave where this meets the vertical point where the X-B; A-C line convergence joins. Point 3 must be higher than 1 when looking at WW short and vice versa. The lines must converge to give the 'wedge' pattern...
Hi,
I'm not sure if your post was directed at me (?) but I am assuming it was. I, too, came across the WW pattern years ago and find it interesting - I don't trade it, but generally look at the target line as a guide as to where the market may be heading. For me, identifying the potential WW is the easy part, and no you don't need whatever an Indy is to spot it, but deciding whether it would be a good bet to trade is the hard part. Looking for reasons why the reversal may actually take place (vs continuation) is the more rewarding aspect. The lower time frame chart I posted was more just to zoom in on the price action, but when I referred to the WW there, the points 1 and 3 are on the line and the target line I inserted crosses below the high of the 4 point because I can see that this was an overshoot of the test of resistance (looking to the left).
  • #604
  • Mar 30, 2017 5:17am Mar 30, 2017 5:17am
I have a question. Tell me for what reason the indicator parvizclassicWW v3 Is not displayed on the chart, but more specifically as several post above in the picture two gold graphics. Perhaps you need an additional indicator or you will be kind enough to provide a kit with a template
t.me/mrt141184
  • #605
  • Mar 30, 2017 5:30am Mar 30, 2017 5:30am
So to carry on from my original charts, we have a number of good reasons to enter this reversal and trade the Wolfe Wave.
The bulls showed the ability to string 3 decent sized bars together whilst breaking the trend line.
The bears met support and formed a double bottom (thick blue line) whilst at the same time forming a triangle / wedge (thick red line) and also a micro-wedge (thick orange line). The excellent bull signal bar then provided and entry at one tick above with a stop at around 10730. This still may not work out, but there were, in my opinion, sound reasons to take this trade.
There is an adverse magnet for a measured move down at around 10700 though.

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  • #606
  • Mar 30, 2017 5:32am Mar 30, 2017 5:32am
Quoting Grimweasel
Been trading WWs for years. The secret is that the 'X' must be a new high or low. You can't have an X in mid price obscurity. WWs exist at the bottom and tops of moves and the best ones stand out -you shouldn't need an Indy to spot them! The target price should, IMHO (and Linda Rache's) be the intersection of the line connecting points 1 & 4 of the wave where this meets the vertical point where the X-B; A-C line convergence joins. Point 3 must be higher than 1 when looking at WW short and vice versa. The lines must converge to give the 'wedge' pattern...

Exactly.
LDFX Trading Ltd
  • #607
  • Mar 30, 2017 5:34am Mar 30, 2017 5:34am
Quoting salamanda74
So to carry on from my original charts, we have a number of good reasons to enter this reversal and trade the Wolfe Wave. The bulls showed the ability to string 3 decent sized bars together whilst breaking the trend line. The bears met support and formed a double bottom (thick blue line) whilst at the same time forming a triangle / wedge (thick red line) and also a micro-wedge (thick orange line). The excellent bull signal bar then provided and entry at one tick above with a stop at around 10730. This still may not work out, but there were, in my...
Your posts on wolf waves are for most not corrects, you are misleading the readers.
LDFX Trading Ltd
  • #608
  • Mar 30, 2017 5:46am Mar 30, 2017 5:46am
Quoting LDFX
{quote} Your posts on wolf waves are for most not corrects, you are misleading the readers.
So in Bill Wolfe's book where he outlines 'The Perfect Wave' - where is the new high made at the target price?

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I am certainly not attempting to mislead anyone. I make it quite clear that my aim is to spot the WW and look for a number of reasons to trade a reversal on, probably, a lower time frame whilst using the target line to look for support or resistance in that area to aim for. In the process I hope to help people to understand a bit more about price action so that they don't blindly trade (IMHO) meaningless Fib numbers whilst trying to catch falling knives.
Constructive posts are, in general, more helpful.
  • #609
  • Mar 30, 2017 6:00am Mar 30, 2017 6:00am
Quoting salamanda74
{quote} So in Bill Wolfe's book where he outlines 'The Perfect Wave' - where is the new high made at the target price? {image} I am certainly not attempting to mislead anyone. I make it quite clear that my aim is to spot the WW and look for a number of reasons to trade a reversal on, probably, a lower time frame whilst using the target line to look for support or resistance in that area to aim for. In the process I hope to help people to understand a bit more about price action so that they don't blindly trade (IMHO) meaningless Fib numbers whilst...
"where is the new high made at the target price?"

I was not talking about that but about your wrong wolfe wave examples, the target is up to debate of course and up to everyone, which is actually the hardest part, where is the best taking profit level, as in any pattern/strategy/system.

I have no doubt that your participation is of a good intention but your are just wrong, you should read more of this thread and step back on your posting because most of it are not good examples.

I am sure your attempt was not to mislead anyone, I am just saying that you are doing so because you do not fully understand the so said pattern.

Regards,
LDFX Trading Ltd
  • #610
  • Mar 30, 2017 6:10am Mar 30, 2017 6:10am
Quoting LDFX
{quote} "where is the new high made at the target price?" I was not talking about that but about your wrong wolfe wave examples, the target is up to debate of course and up to everyone, which is actually the hardest part, where is the best taking profit level, as in any pattern/strategy/system. I have no doubt that your participation is of a good intention but your are just wrong, you should read more of this thread and step back on your posting because most of it are not good examples. Regards,
LDFX,
Please point out, in the Wolfe Wave I posted above (Post 601), what you feel is wrong with it and let's have a constructive discussion. I am perfectly happy to admit I am wrong if it transpires that I am.

Many thanks

Edit: Actually, I do understand that that is not a good example and I admit that you are correct on this occasion. The length of the legs are not particularly symmetrical.
  • #611
  • Mar 30, 2017 6:11am Mar 30, 2017 6:11am
Quoting salamanda74
{quote} LDFX, Please point out, in the Wolfe Wave I posted above (Post 601), what you feel is wrong with it and let's have a constructive discussion. I am perfectly happy to admit I am wrong if it transpires that I am. Many thanks

Yes fair enough, give me a moment please, I will try my best.
LDFX Trading Ltd
  • #612
  • Mar 30, 2017 6:17am Mar 30, 2017 6:17am
Quoting LDFX
{quote} Yes fair enough, give me a moment please, I will try my best.
It is ok - I have edited the post above and I have conceded that, on this occasion, you have a point and are correct!
  • #613
  • Mar 30, 2017 6:20am Mar 30, 2017 6:20am
Quoting LDFX
{quote} Yes fair enough, give me a moment please, I will try my best.

Ok, first of all is the 4th point you called, it is not a wave, it is just nothing compared to the 1-2 and 2-3 wave, it is just noise.

However the chart you showed is luckily clean, we can clearly see the beginning of an ABC retracement pattern with usually a wolfe wave pattern in it, I can just see the first leg, XA or A, then on zooming in you are showing an invalid wolfe wave because it is an expanding channel rather than a wedge, I can see there is an AB=CD pattern in terms of levels but not in time, the downward momentum is clearly strong, put a channel on it as an indicator and you will see.
LDFX Trading Ltd
  • #614
  • Mar 30, 2017 6:40am Mar 30, 2017 6:40am
Quoting LDFX
{quote} Ok, first of all is the 4th point you called, it is not a wave, it is just nothing compared to the 1-2 and 2-3 wave, it is just noise. However the chart you showed is luckily clean, we can clearly see the beginning of an ABC retracement pattern with usually a wolfe wave pattern in it, I can just see the first leg, XA or A, then on zooming in you are showing an invalid wolfe wave because it is an expanding channel rather than a wedge, I can see there is an AB=CD pattern in terms of levels but not in time, the downward momentum is clearly...
As I said above, I have conceded that you are correct.

I do disagree about your 'noise' comment as I don't think that the market makes noise. There is generally a reason for price movements even if we don't understand what those reasons are - just my opinion.

OK, I will try to be more careful about what I call Wolfe Waves in future.

I am more interested in the price action so if I see something that I feel can help others during a potential reversal I will try to explain it as I am enthusiastic about understanding what charts are telling us. When I see the general pattern that I outlined in post 601 I will look for reasons to trade a reversal, but you are correct - it is not a Wolfe Wave. However, these patterns do often give a reversal trader something to think about.
All the best and thank you for the constructive discussion.
  • #615
  • Mar 30, 2017 6:48am Mar 30, 2017 6:48am
Quoting salamanda74
{quote} As I said above, I have conceded that you are correct. I do disagree about your 'noise' comment as I don't think that the market makes noise. There is generally a reason for price movements even if we don't understand what those reasons are - just my opinion. OK, I will try to be more careful about what I call Wolfe Waves in future. I am more interested in the price action so if I see something that I feel can help others during a potential reversal I will try to explain it as I am enthusiastic about understanding what charts are telling...

Is it a matter of being right ?

You talked about constructive post and I tried my best about trying to correct you in the wolfe wave pattern.

The noise I was talking about was relative to the 1-2 and 2-3 wave as it was maybe 15% on it size, it is then noise relative to it.

And how would have been your risk vs reward with such a small profit target ? Noise is what it was.

The market makes noises all the time, pulling out mirages in front of you, the key is to see the noises, AKA the insignificant moves that takes place, and to filter them, otherwise you will see patterns everywhere as your example in post 601.

By the way, how has been the trade of the post 601 ?
LDFX Trading Ltd
  • #616
  • Mar 30, 2017 7:09am Mar 30, 2017 7:09am
LDFX,
It sounds like you are looking for a fight!
'Noise' to me is generally what people call price movements when they can see no reason for what is going on so if you were referring to noise as a comparison to the prior wave then fine - it is not the terminology that I would use, but I hear what you are saying.

As I said at the start of post 601, my reason for looking for the reversal up was to have a test of the trend high or at least the trend line that was broken so actually the potential reward for the trade idea was very large - my target is 10804 - 10812 if you want figures. Just because there is a target line there does not mean the market will stop there.

Are you asking how the trade is doing because you don't have charts and cannot check yourself or are you asking to try to make me look silly? Depending on how one manages one's trades one will not lose money on the trade I outlined. Everyone manages trades differently and one could have removed half at 1x risk with a view of swinging the rest, or one could wait for 3 or 4 consecutive bear bars and decide that the market was flipping and exit at the market. Or, one can just rely on one's stop and accept that you win some, you lose some.
  • #617
  • Mar 30, 2017 7:12am Mar 30, 2017 7:12am
Grimweasel and expo33 will second me I am sure.
LDFX Trading Ltd
  • #618
  • Mar 30, 2017 7:17am Mar 30, 2017 7:17am
Quoting salamanda74
LDFX, It sounds like you are looking for a fight! 'Noise' to me is generally what people call price movements when they can see no reason for what is going on so if you were referring to noise as a comparison to the prior wave then fine - it is not the terminology that I would use, but I hear what you are saying. As I said at the start of post 601, my reason for looking for the reversal up was to have a test of the trend high or at least the trend line that was broken so actually the potential reward for the trade idea was very large - my target...

If a fight then I am out, I have no time to waste.

("Noise to me is generally what people call price movements when they can see no reason for what is going on" (Quoting salamanda74))

Exactly dude is what happened on your post 601, an irrelevant price move to qualify for a wolf wave pattern.

Haha, so the result of the trade in post 601 would make you look silly ? I am wondering why...
LDFX Trading Ltd
  • #619
  • Mar 30, 2017 7:45am Mar 30, 2017 7:45am
Watching this setup , its not perfect because its not off the 1st bottom low,

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  • #620
  • Mar 30, 2017 7:51am Mar 30, 2017 7:51am
Quoting Tbuild
Watching this setup , its not perfect because its not off the 1st bottom low, {image}

Well, it is the beginning of a wolfe wave, the set up is still correct, also the AB=CD would end up at a resistance level, it is a valid pattern to watch.

It is actually 2 wolfe waves in it, so even better.

Filtering the patterns with confluence is way better than any indicators.
LDFX Trading Ltd
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