Tasuki

jj, As far as "so much for that being strength"---if the bar had closed WITHIN the playing field I'd say that it meant strength, but as it closed lower, and below the halfway mark of the bar, I'd look at it as weakness. What is this stock?

Torero, I didn't know about SWF's compact format. That's cool, and it's OK, since we can just download the viewer (and its required plugins) for free. So, I guess that's not a problem. My problem is that I know next to nothing about reading tape (except what I've picked up from Hubert Senters on Tradethemarkets.com), and absolutely nothing about comparing the matrix to the T&S, which sounds extremely interesting. You've obviously got some great insights here, but I'll be damned if I can figure them out. As the tape rolls, I can see you putting a box around green prices on the T&S (I presume you've got the colors set so that this means that the contracts were sold on the offer (default color is green for offer, red for bid, but you can change them in Tradestation). Then, I see you drawing an arrow going down, and indeed the price goes down. Now, forgive me for my utter ignorance, but usually if I see somebody or somebodies selling on the offer, the price usually goes up, not down. In your remarks on permalink #7, you actually describe this action as follows: "When that same price turns to green, support is about to give, buyers have either abandoned that order or the sellers have stepped down to absorb that price level. Usually expect the price to move down." Frankly, this is completely counterintuitive to me. Obviously, it worked, but I can't understand why--why would support give way when the price turns green. I don't know about how wheat trades, but on the ES, if you start seeing green, at least green with some size attached, price is in the process of going up, not down. Is the reverse action some peculiarity of the way wheat trades? Does anybody else understand my confusion? Torero, if you can explain this, please do. I think we'll all benefit. You've obviously got something really valuable here, but without an audio, I just can't figure it out. ...and Moses spake and he said, Thou shalt gird thy loins and travel to distant lands to purchase thyself a microphone, and there shall be rejoicing in the land of TradersLab.

Turns out that an SWF file is a "Seattle Film Works" file. I downloaded Irfanview, but it didn't recognize the *.swf file, even though I made sure to check SWF during the download as one of the file types I wanted Irfanview to recognize. When I tried to manually open the file, I got the following error message: Can't load PlugIn: FLASH.DLL! Please install or update PlugIns from IrfanView homepage! Frankly, this is turning into a nightmare. Maybe the creator could recreate the file as something "normal" like an MPG file? ...edit: OK, finally got the PlugIns downloaded and installed, and SOMETHING is happening on the Irfanview window---there's a live shot of a Time and Sales and what looks like a matrix or something, and somebody's writing on it, BUT THERE'S NO SOUND!!!!!!!!!! Was there supposed to be sound? Because without it, the file is pretty much incomprehensible.

Interesting, waveslider. The attached chart has a similar pattern vis a vis point 1, and a few other things going for it, most notably point 2, but a few marks against it too, especially that poor show for a point 5. Still, it did work out, which counts for something. This raises an interesting question. There's a thread on TradersLab which deals with Volume Spread Analysis (VSA), and many people on the thread have obvserved that VSA doesn't work all that well on very short timeframes. In fact, both Pivotprofiler and I have posted comments saying that VSA seems to work best on timeframes of 15 minutes and above. SO, my question is, with Wolfe Waves, do they work best on a certain kind of chart? I seem to have quite good luck finding them on 233 tick charts on the ES. Somewhat less luck with minute charts. As most traders know, the patterns created by tick-based charts can be quite different from the patterns seen on minute-based charts. I wonder if maybe Wolfe Waves would benefit from the fluidity that's usually seen with tick charts (or even volume based charts, perhaps). Just wondering.

Thought I'd repost waveslider's perfect Wolfe Wave from Tuesday, November 13. ES 233 tick chart. Might be useful to see it in a wider context, to show just why it's as good an example as it is. See notes on chart.

waveslider, very sweet chart. thanks for posting it. Perfect example. One question--where would you put the point 3? See attached--I've marked up your chart. Thanks.

Attached is a five minute chart of today's ES action. There was a semi-OK Wolfe Wave that semi-failed, and I think I know what happened. Here's my analysis (comments, please): 1) point 1 was within a range 2) point 2 looked like it was going to break out of the range, and sucked in new buyers---notice, however, that it didn't break above the morning's high--it would have made for a stronger pattern if it had. 3) point 3 was lower than point 1, albeit not by as much as I would have liked 4) the line from point 1 to point 4 was a bit steep, methinks. 5) point 5 broke below the line from points 1 to 3, but here's the major weakness of the pattern as it set up--point 5 didn't scare people enough--it held the support line (dotted red line). The pattern would have been much stronger if it had dipped below that support--doubtless lots of traders held on 6) the place to buy would have been the break of the dotted yellow line, and your first target would have been the extension of the line from points 2 to 4 (thin green line). I haven't done a survey yet, but I'm wondering if that line from points 2-4 should maybe always be your first target (take off part of your position?) when trading a Wolfe Wave. Experienced Wolfies, your comments would be appreciated. 7) Ultiimately, the pattern failed to meet its target (the extension of the line from points 1 to 4), but it still went part way. I'm wondering how often my putative first target is hit, and then the price pulls back?

waveslider, thanks SO much for your lessons and your patience. How about this next one (see attached)? This would seem (to me) to have everything going for it: 1) waves pretty even 2) point 1 in a range 3) point 2 definitley was an attempt to break out of congestion and encouraged buyers who undoubtedly got washed out at point 5 4) point 3 lower than point 1 5) point 5 seems, so far at least, to be bouncing off the 1-3 extension line 6) line 1-4 has multiple touches 7) from a fundamental perspective, the semiconductors were the biggest disappointment in the last rally and they are both oversold and underperforming and definitely ripe for a bounce. So, whaddya think? Have I got my ducks in a row this time?

waveslider, you asked me to throw out more ideas, so here goes. Attached chart probably just displays my ignorance. Is this a WW that failed, or is it not a proper WW setup (and if not, why?). I suspect that point 2 isn't a good point 2 because of the higher prices directly to the left, so it's not really a near term top--or is it? How much of a near term top does point 2 have to be? Are there other reasons why this isn't a good setup (other than the fact it failed--even market geometry patterns fail sometimes)?

Thanks, waveslider, OK, so the ZG chart (permalink #59) isn't a proper bullish Wolfe Wave, I gather, because point 3 should have been lower than point 1. I seem to be coming up with several "variations" on the Wolfe Wave theme that work out anyway...which makes me wonder how much latitude there is in this pattern. Just sticking with bullish WW for the moment, I gather from what you said above that, if you extend the line segment from points 1 to 3, you should find that point 5 at least touches this downtrendling line, or breaks below it. Here's a question, and I can use the current chart of the ES (permalink 58) as my example--if the price action around point 5 keeps going down and down, as it has been doing this past week, how do you know when you've got a proper point 5? This is actually pretty important, because with a bullish Wolfe Wave, you're supposed to enter your position long after point 5 has been put in. How do you know when it's been put in? How do you know when to safely enter the position?

Here is a beautiful WW on the ZG daily. Wish I'd seen this in real time. Note that points 1, 3 and 5 form something of an arc. No clue if this is significant in any way, whether it predicts the probable success of the WW pattern or if it's completely random. I'm still researching the Wolfe Wave, so I'm just tossing ideas out as I see them.

hopefully my chart will show up this time. Definitely something fishy with TL servers...

Waveslider, attached is my attempt to recreate bh's ES Wolfewave that looks unreliable. This raises a question I've been meaning to ask---for the very best WW patterns, should the extension of the line segment from point 1 to point 3 hit point 5? In an earlier post (permalink 33 on this tread), you said that my QQQQ daily chart had a point 5 that was "too deep to take the pattern seriously". Maybe that's true here for this ES pattern? More generally, though, should you be able to draw a straight line from points 1 to 3 and hit point 5? Is that part of the WW rules, or even a decent rule of thumb? edit---damn, what happened to my chart? I'll try to post in following message.

waveslider, it looks like that ER 60 Wolfe Wave isn't going to work out, or at least I would have been stopped out by now if I'd been in it. Which raises the question, How well do WW work? As you may know, Tim Morge of medianline.com says he's done careful statistics on his pitchfork setups, and claims that they work pretty close to 80% of the time. Do you know if WW are as good as this? Thanks.

great, now I can't edit posts either. Something screwy with TL servers, methinks.

test--for some reason my "quick reply" posts won't post

See attached. Is this a valid Wolfe Wave?

Yes, TG, I like your more conservative approach. I keep wondering what I can get away with to call something a Test or a No Supply bar. I think my attitude needs changing--I should be more stringent in viewing the rules. I'm still not using VSA to make trades, so I have the luxury of being wrong without losing my shirt. Eventually, I want to get good enough to place real money on VSA setups, and when I do, I think your conservative approach would serve me well.

waveslider, see attached. This is how I see the pattern setting up on my chart in Tradestation. Since the price has dipped below point 5-----well, where would you put your stop on this trade, or more generally, where does one put one's stop on Wolfe Waves? For a bullish WW, shouldn't it be somewhere below point 5? The profit target should be up around 840, yes?

Actually, TG, if look at the last chart PP posted (permalink #670) you'll see that there are 4 "No Supply" bars listed, and all four of them close below the previous bar. So, here's my comparison of Test and No Supply: 1) both close lower than the previous bar 2) both occur on volume that's lower than the previous 2 bars 3) both occur at price lows, after or during a period of consolidation So, the only difference I can see right now between them is that a Test is suppose to close near its highs and a No Supply closes near its lows. One question I have is how important it is for a Test to dip below support to "Test" new lows. That would seem to make sense, but some examples I've seen here (e.g. permalink #630, a Tradeguider example; permalinks #106 + #166 both from PP) do not stick their noses into new lows, and they still get called Tests. So, maybe the main criteria for a Test are its location (price lows, consolidation) as well as its high close and low volume, with an added benefit being a long shadow dipping below support. Well, that's my best shot at it anyway.

PP, would you please explain for us the difference between "test" bars and "no supply" bars? Thanks so much, Taz

Thanks, waveslider, your description of a proper WW is perfect. Now I have a better idea what to look for--still not sure how to make my eyes see it. I'd give anything for an indicator for Tradestation like I have for Gartleys and Butterflies. There is a WW indicator posted on TradersLab, but comments below it say that it's not close to being correct for a true WW, so I don't want to try it and start seeing the wrong thing. The best I can figure, your chart is for the Russell emini, something like a 120 minute chart? In future, could you (pretty please) include the X and Y axes in your charts, as well as the contract name? It would really help. Thanks. I'll post some proper WWs if I can find them. Not as easy as I originally thought!

waveslider, thanks for your replies. Please explain why my first chart (@TU Weekly) was not a true WW. You said that the #2 point needs to be a recent new high or low--was this not a new high? OK, there were higher prices prior to point #1---does that disqualify point #2 from being a "recent" new high? It was higher than the high at the very beginning of October 2006--that doesn't count? Just trying to get the rules clear in my mind. Ah, one more question--I didn't understand what you meant about the volume at point #4. Is volume analysis part of Wolfe Waves? I don't recall seeing anything about volume on Wolfe's site--maybe I missed it. Many thanks.

One thing I'd like to discuss with anyone who'd interested are the differences between Gartleys (or Butterflies) and Wolfe Waves. They definitely share some similarities, but every Gartley or Butterfly pattern I've seen does not work out to be a successful Wolfe Wave, even though they seem to start out similarly. Apparently, the ratios of the swings are different, but I haven't yet discovered the exact differences. If anybody knows (or even understands what the heck I'm trying to get at) then kindly enlighten me! The attached chart is the best example I can find right now. The "M" shaped pattern in dark green is a "Bull Butterfly" i.e. a butterfly pattern with a bullish expected outcome. If you're unfamiliar with the terms "Gartley" and "Butterfly" I'm sure there's a ton of info on the web. As you can see from the pattern, it's possible to label the swings of the butterfly pattern as if they were Wolfe Wave swings, and indeed, in this case, if you extend the line segment from 1 to 4 you will actually get to the price that was eventually reached, but not in the time that the Wolfe Wave pattern expected---according to Wolfe, the price target should be reached at about the time when the extended line segments 1-3 and 2-4 meet. Clearly that didn't happen here. Other examples I've found of Gartleys and Butterflies are even less Wolfe-like, usually alot less so. As I said above, there has to be something about the ratios of the swing highs an lows that's different between Gartley/Butterfly and Wolfe Waves, but as yet I'm clueless as to what the exact differences are. Like I said, if anybody understands this, please post!

See attached. I'm just starting to study Wolfe Waves, but I think the attached chart is an example of a successful one.