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Wolfe Waves - Get in the Zone

  • #1,501
  • Edited May 29, 2017 1:30am May 28, 2017 11:38pm | Edited May 29, 2017 1:30am
Quoting salamanda74
{quote} Hi there and welcome to Expo's quality WW thread! It has been said that people don't trade the markets; they trade their beliefs about the markets. So first you have to ask yourself if you believe that Fib numbers have any use in the markets. If you do then you can probably trade them, but ask yourself why do you believe in them. I know that Expo, or Kurt, among many others believe in these % extensions (that for some reason get labeled as Fibos but I'm not sure what the numbers actually have to do with Fibonacci sequence!- if they do then...
Nice post Sal. It's always productive and educational to here some views from the other side of the coin sort of speak. By the way, I thought your charts looked familiar. I had recently downloaded the trial platform to check out their renko options.

The extensions come from the true retracement levels that are derived from the actual fibonacci number sequence.

Here's a copy and past from this pdf: http://www.forex.com/uk/pdf/Fibonacci-guide.pdf

Maybe of some interest to others, just thought I'd post it here.
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If you use the legitimate retracement levels derived form the # sequence: .236, .382, .618. and you come up with the default meta4 extension levels.

1/.236 = 4.23
1/.382 = 2.61
1/.618 = 1.61

The rest are derived from the added levels thru squaring , etc etc. There are entire books written on the subject but not really something we need to get into for our purposes.

Anyways, more importantly, as you stated, we need to be looking left to see the previous S/R. My love affair with fibos/extensions comes when multiple levels match up with those previous S/R levels.
.
I believe that human behavior is at the root of price action. How and why that behavior is shaped could come from a myriad of reasons from technicals, to fundamentals, to order flow, to insider trading, to HFTs, to reasons beyond the scope of our knowledge. For me, if Fibo spirals can exactly model physical nature, then it's my belief that Fibo levels can model traders behavior (to some extent). Anyways, probably beyond the scope of this thread, just rambling on. I suppose there are Fibomaniacs and then there are anti-Fibites, lol.

I'll try to give an example here in a little while when I get a moment.
Pride always comes before destruction.... -Proverbs 16:18
  • #1,502
  • May 29, 2017 12:43am May 29, 2017 12:43am
PREVIOUS S/R with FIBONACCI retracement/extension analysis

Sorry if the chart is a little busy with 4 different fibos but I wanted to show the whole picture. If even one trader finds this post useful, then it's worth posting.

NZD/JPY 4H POTENTIAL CWW
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Lets try and break it down. Others may see it differently, and that's a good thing. This is how I see it. Note, the AB=CD is basically about 80.60

THE THOUGHT PROCESS

1) If price actually continues higher on the D leg, then based on previous S/R and the psychological round number theory, 80.00 should be a big hurdle as far as resistance goes. But let's assume for the moment that price does indeed break through that psychological 80 level, now what?

2) The 61.8 FIB retracement level is basically within 10 pips of the AB=CD price. Remember, we are talking about a structure that spans over 400 pips and a retracement that started 4 months ago.

3) The 141.4FIB extension of MH (major high) is within a few pips of AB=CD

4) The 200FIB extension of XA is 13 pips from AB=CD

5) The 361FIB extension of BC is 17 pips from AB=CD

Ok so what, a bunch of meaningless FIB retrace/extension levels just happen to be in the area of AB=CD. well, not so fast lets look a bit deeper.

6) The acceleration zone - looking left you really don't see any previous important S/R in this zone. So, in my opinion, if price does indeed break through the 80 barrier, then there may be one last impulse wave as price gets into the acceleration zone.

Here's the kicker. When you look back to the right from the acceleration zone you see basically nothing in the way of FIB levels. Interesting to say the least considering we are talking about a 50 pip zone. Instead, all of the most recent and most pertinent FIB levels are all piling up right around that AB=CD level. Coincidence?

7) And finally, it is pretty clear where the major supply level is at (major resistance)

So the only question is where to enter into this trade if it so happens that price does penetrate into what I am calling the "acceleration zone".

For me, there is no need to get to cute here. I'm not trying to pick tops/bottoms. I'm trying to pick zones that have a high probably of a price reversal. From the chart, you can see the scale in zone. I will likely use my scaling in script to set up about 10 small positions about 3-4 pips apart. Maybe even 20 smaller positions 2 pips apart.

Sorry if this seemed like an endless rant. Hope it helps someone in some small way. I know it helps me.

Cheers to a great week ahead -Kurt
Pride always comes before destruction.... -Proverbs 16:18
  • #1,503
  • May 29, 2017 1:03am May 29, 2017 1:03am
The only two trades I held thru the weekend. Be nice London, daddy needs a new pair of shoes. I think they both highlight the scaling in option that I prefer. We don't need perfection, we only need preparation and patience.

Both doing well with plenty of scaled in positions giving the option to micro manage

EUR/GBP 4H CWW (scary because all the "experts" are bullish on this pair)
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GBP/CAD 4H CWW (shown on hourly for zigzag purposes)
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Pride always comes before destruction.... -Proverbs 16:18
  • #1,504
  • May 29, 2017 1:37am May 29, 2017 1:37am
Quoting Michitsch23
Hello expo and hello to all other users :-) I am really happy to have found this strategy and you guys. I have already spent many hours exploring WWs and it is huge fun. But I wanted to ask if someone can take the time and explain me the fibo lines! So where do I put them in and how do I interpret them? Thank you for your answers! :-)
Hi Mich and welcome to the thread.

If you google 'fibonacci forex" or "fibonacci analysis pdf" you'll find pages and pages of info on the subject
Pride always comes before destruction.... -Proverbs 16:18
  • #1,505
  • May 29, 2017 2:02am May 29, 2017 2:02am
Quoting Expo33
{quote} Nice post Sal. It's always productive and educational to here some views from the other side of the coin sort of speak. By the way, I thought your charts looked familiar. I had recently downloaded the trial platform to check out their renko options. The extensions come from the true retracement levels that are derived from the actual fibonacci number sequence. Here's a copy and past from this pdf: http://www.forex.com/uk/pdf/Fibonacci-guide.pdf Maybe of some interest to others, just thought I'd post it here. {image} If you use...
Hey Kurt,
Thanks for the enlightenment! I've learnt why they are called Fib ratios and it's still early on a (bank holiday) Monday morning. May the learning continue through the week ahead.
It's an interesting discussion regarding Fibs and I guess there's no right or wrong answer. Like you, I believe that human behavior is at the root of price action and will be until we evolve into a different species. I understand Fib spirals modelling physical nature, but I do not see how Fib spirals model, or have any bearing on, human behavior. Each to their own and if a trader's beliefs help him/her to trade the market then that has to be a good thing. Confidence in the market is a necessity and if Fib levels can, somehow, instill confidence in some traders then they have a powerful tool.

Here's to a great week!
Stuart
  • #1,506
  • Edited 2:55am May 29, 2017 2:11am | Edited 2:55am
Quoting salamanda74
{quote} Hey Kurt, Thanks for the enlightenment! I've learnt why they are called Fib ratios and it's still early on a (bank holiday) Monday morning. May the learning continue through the week ahead. It's an interesting discussion regarding Fibs and I guess there's no right or wrong answer. Like you, I believe that human behavior is at the root of price action and will be until we evolve into a different species. I understand Fib spirals modelling physical nature, but I do not see how Fib spirals model, or have any bearing on, human behavior. Each...
Amen mate.

Trading without confidence is like that dream where your standing on some railroad tracks in your underwear, paralyzed as a speeding train is heading your way.
Pride always comes before destruction.... -Proverbs 16:18
  • #1,507
  • May 29, 2017 10:58am May 29, 2017 10:58am
Thank you too expo for your detailed answer!

What do you guys think about this chart formation? This could lead to a good trade or u have an other opinion?
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All the best, Marc
  • #1,508
  • Edited 12:22pm May 29, 2017 11:58am | Edited 12:22pm
Quoting Michitsch23
Thank you too expo for your detailed answer! What do you guys think about this chart formation? This could lead to a good trade or u have an other opinion? {image} All the best, Marc
Hi Mich.

I'm not sure what your planning on trading but as of this moment, there's a bearish WW forming. However, if price falls further the structure won't be valid as it will lose it's convergence.
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Pride always comes before destruction.... -Proverbs 16:18
  • #1,509
  • Edited 12:16pm May 29, 2017 12:00pm | Edited 12:16pm
I'm still long on fundamentals here. There is also a bullish WW on the weekly for this pair I but couldn't resist a good 20 pip scalp on this nicely formed bearish WW. In and out for 20 pips. The AB and CD legs were very crisp with decent symmetry. Also, the 161FIB extension is commonly a profit taking zone for bulls, a no brainer trade here.

Like I always say, we aren't trying to predict some major shift in sentiment, or predict where prices will be 5 waves down the road. We're just trying to capitalize on one simple corrective impulse wave. If you can harvest 20-40 pips a day, you'll be financially free in a few years

NZD/CHF 1H CWW
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And here's the weekly I posted last week
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Pride always comes before destruction.... -Proverbs 16:18
  • #1,510
  • May 29, 2017 5:25pm May 29, 2017 5:25pm
Oh yeah, i analysed the chart wrong! In order to understand it better, I sketched the two scenarios. Maybe the illustration helps other members too.

Greetings, Marc
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  • #1,511
  • May 29, 2017 5:49pm May 29, 2017 5:49pm
Maybe anyone can tell me, where i can find the HORIZONTAL WOLFE WAVE's description?

Thanks and good night from germany! :-)
  • #1,512
  • Edited May 30, 2017 3:35am May 29, 2017 6:18pm | Edited May 30, 2017 3:35am
Quoting Michitsch23
Maybe anyone can tell me, where i can find the HORIZONTAL WOLFE WAVE's description? Thanks and good night from germany! :-)
The only difference between a classic WW and a horizontal WW is that line XB is horizontal, or very close to it.

Here is an example that I had saved a while ago
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Pride always comes before destruction.... -Proverbs 16:18
  • #1,513
  • May 29, 2017 7:35pm May 29, 2017 7:35pm
Im looking at this wave. its a little sloppy, not really sure about where the X setup is. ideally it should be at previous low below last swing high.
put a gann line on it and prior support , Well see !!

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  • #1,514
  • May 30, 2017 2:28am May 30, 2017 2:28am
Forgot to post this one when it was live. Small time frame but couldn't resist such perfect AB=CD symmetry, both time and price. Picked up an easy 30 pips. No need to target steep target lines.

GBP/CHF 5MIN CWW
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Pride always comes before destruction.... -Proverbs 16:18
  • #1,515
  • Edited 5:24am May 30, 2017 2:48am | Edited 5:24am
Quoting Tbuild
Im looking at this wave. its a little sloppy, not really sure about where the X setup is. ideally it should be at previous low below last swing high. put a gann line on it and prior support , Well see !! {image} {image}
Hi Tbuild.

I was away from my PC when you posted this so I couldn't get a really good look at the chart. A couple pf things.

1) Just be aware that there is a bearish WW in play on the daily. Not that you can't trade against that and make some pips. Just always good to know when there's a higher TF WW in play.

2) Also, beauty is in the eye of the beholder, and there isn't a right or wrong way. However, for this setup, I don't like that there is a price print that is lower than point X before point A is printed.

This is the way I would see the wave. No confluence with the Gann fan (not shown) and no confluence with the BC extension, but there's perfect confluence with the larger FIB retracement (the 38.2)

The fact that the AB=CD is a round number, 111, implies that there would likely be some interest beforehand. And there was, right about the 261 extension. Of course this is in hindsight now but I thought I'd post my thoughts anyways.

Good luck
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In case you haven't seen it from my previous post, here is the WW on the daily.
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Pride always comes before destruction.... -Proverbs 16:18
  • #1,516
  • May 30, 2017 6:50am May 30, 2017 6:50am
Thanks Kurt for the detailed explanation. i was actually looking at that setup on 1 hr chart you showed , but i didnt think it was valid because of the higher A.
Blue points are mine. But it wasnt the best set up to start with. thanks much for this tread !!

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  • #1,517
  • Edited 8:19am May 30, 2017 7:19am | Edited 8:19am
Can anybody explain me, why this trade got lost?

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  • #1,518
  • May 30, 2017 12:05pm May 30, 2017 12:05pm
Quoting Tbuild
Thanks Kurt for the detailed explanation. i was actually looking at that setup on 1 hr chart you showed , but i didnt think it was valid because of the higher A. Blue points are mine. But it wasnt the best set up to start with. thanks much for this tread !! {image}
You're welcome TB.

Not sure if you got in the trade but in the end it made it right to the target line. A big bag of pips!
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Pride always comes before destruction.... -Proverbs 16:18
  • #1,519
  • May 30, 2017 12:22pm May 30, 2017 12:22pm
Quoting Michitsch23
Can anybody explain me, why this trade got lost? {image}
As I stated last week, I stayed away from any CAD pairs due to the OPEC meetings that took place on May 25th, which is basically right about the time that this structure was completing.

In looking at the trade, the price bounced up over 50 pips from the AB=CD level. So that's what we are looking for. This is exactly why I would have moved my SLs to BE at that point. In addition, I tend to scale in multiple positions, so I would have had the option to bank a little profit as well. So even though price ultimately went back down, you can keep yourself protected by micro managing.
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Pride always comes before destruction.... -Proverbs 16:18
  • #1,520
  • May 30, 2017 1:23pm May 30, 2017 1:23pm
Quoting Expo33
{quote} As I stated last week, I stayed away from any CAD pairs due to the OPEC meetings that took place on May 25th, which is basically right about the time that this structure was completing. In looking at the trade, the price bounced up over 50 pips from the AB=CD level. So that's what we are looking for. This is exactly why I would have moved my SLs to BE at that point. In addition, I tend to scale in multiple positions, so I would have had the option to bank a little profit as well. So even though price ultimately went back down, you can keep...
Ok thank you very much for such good information! Expo if you have nothing against it, I'd like to ask you a few personal questions. I have read in this threat, that you are a professional trader and trade approximately 80% of your trades with this strategy. Therefore (and because I have noticed it in my own trades) i think this is a very powerful strategy. How many Pips you catch round about in the month with this strategy? And how long do you practiced to become profitable?

And to all the other users who have been involved with this strategy for a long time: How much pips do you manage per month?

Thanks in advance, Marc
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