waveslider

I think you are right on all points. This was a failed pattern, and that target line was a little too steep - but those ones work some time, just lower probability. Using the top of the channel is a good 1st target, setting remaining position at breakeven. Here's that pattern in ES from yesterday... 233 tick chart

SHV is a bond fund I put excess cash in. It is an etf, you can buy it like a stock. It gaps down at the beginning of each month because it pays a dividend. check it out - easy, low risk

yeah I think you got this one nailed. I'm sure there's other confirmation on that chart too. It looks like a pretty major double top on one hand, but its an expanding pattern, so really it's just going sideways with increasing volatility. If I were in this trade long I would be careful of volatility dying out - there's a chance this is a major top. Now you understand the pattern. You can start looking for the nuances. For example, I like to see the bars between the 1 and 3 pts. to be more than the bars between the 3 and 5 pts. I haven't quantified this, but I think it is preferable.. WW is not perfect, but the more you look at them the more you will see the how and why, and begin to understand the psychology and balance in the pattern.. Glad you are learning. Do you trade futures much? I noticed a pretty nice one in ES today. My chart program is crashing a little right now, maybe will post later..

Tasuki, see how that when price hit that #5 pt., it started accelerating and didn't even look back? Right in those 2 bars where #5 is, the tails hardly overlap - this was a market in motion. What you want is a failure to accelerate - and some sideways action. Aside from that, this was a very valid pattern - good eye! The #2 pt ideally would have been an attempt to move out of congestion and that would have invited some longs that would have got washed by pt. #5. That's part of the psychology I explained earlier. But you got it pretty close! The move from pt2 to pt3 was an expanding pattern indicating a range.

game on... there is quite a bit of potential profit built into this trade.

PS the power is also in our tax dollars. If we stop funding the government, they have to listen. In that case, their options are to throw us all in jail, or begin martial law. Try imposing martial law on a society that has been free for so long.

I really enjoyed that Ron Paul video. There are some interesting points brought up on this thread, some beaten to death. Some important points: 1. It would be a travesty if the president was elected because he/she WAS AFRICAN AMERICAN OR A WOMAN. Sorry soultrader, that was a thoughtless comment and maybe you didn't mean it that way. 2. A president should be elected for their ideas. Not their past or the SIZE OF THEIR CAMPAIGN FUND. This is a key point guys - the money comes from special interest groups who are buying the presidency and positioning themselves. I realize it's a capitalist country, but money should have nothing to do with getting elected. 3. We need to look beneath the presidency to see what is really going on. How many people here think Bushy actually has "any" power, aside from being a figure-head. This is a trend, and a major sign of corruption at the top. SO if Bush is not the one calling the shots, can we actually vote for someone who will? Or are there more powerful sources like special interest groups (oil, defense, drug, labor, etc.) that over-ride. DOES THIS GOVERNMENT REALLY REPRESENT THE PEOPLE anymore? 3. WHY? kept talking about some law about saluting the flag - Nick the aussie is right about not giving this stuff too much credence. This symbolism leads to blind patriotism which, in my opinion, is total bull. Even the founding fathers would agree that trusting your government is probably the worst mistake you can make. Any government that enforces mandatory patriotism/nationalism over freedom of speech sounds like nazism to me. 4. The power is in the people, the government needs to be reminded of this. For quite some time there has been a majority against the war in Iraq - so why are we paying for it! There is a parallel that goes back to Vietnam, when the PEOPLE were so fed up with the government sending youths off to die that they began rioting in masses. At the time Nixon did not admit their influence, but in his memoirs he said that he took the protesters very seriously, and was fearful of their effect. We need more fear and accountability in government. Responsibility to the people and not to the special interest groups. Folks my parents age, baby boomers, still have this blind faith in the US that they learned from their parents (WWII era). Subsequent generations have lost this faith with the TRUTH about the crap that was done in the past 40 years by agencies like the CIA and even higher up. This is another trend. Future generations are going to have less and less faith in the government when stuff like this keeps going on. They have no reason to have faith, instead what they have is a growing mistrust and a lack of power to do anything about it. Well the power is in numbers, and yes I think that revolution and anarchy is not out of the question someday- just throw in a few variables. I don't like to think about what will happen when the full story comes to light on the 911 events. So that's my ramble, maybe it can spark some new thoughts on this thread, as it seemed to be dying. PS yes I am in canada - wife and daughter canadian, but born in the US and lived there most of my life. I don't agree with Socialism here, don't think it works except in situations like Norway where you have oil buffering the bureaucratic inefficiencies. Canada is so inefficient it's ridiculous.

I find Andrews method most helpful when the market is "swinging" rather than in a strong trend. I don't trade forex ( I do trade currency futures), but from what I've seen, the pairs trend pretty strongly. You might be better off using trendlines and channels. The other point you mentioned about going off on a tangent is applicable to any method, and if you are suseptible to distraction (like me), this is where developing your discipline comes in. Successful traders often use only one or 2 methods, and may wait around for days or more for that method to flash an opportunity. Andrews is a worthy method, it is a good illustration of market symmetry. GOOD luck!

Market touched the green entry line and faded back one more time. Interesting that the Russell is holding its lows while the other indices fall. This is bullish. By taking out Friday's high and low, ER2 is forming an expanding pattern. Monday was not a trend day on the daily chart, this is more sideways action trying to shake people out. I like the looks of a slightly different #1 point on this pattern more and more. The reason is because of the way the 1-4 line matches up with multiple peaks. Andrew's line is still looking good for a primary target. This trade needs to form a higher low, break trend lines , and get over 785.9 level marked in black..

Bh-trade: Yes consolidation below that line does work, especially more violent sideways chop. What you don't want to see is a gap lower (below the line) that just keeps running. That means that the 1-3 line is an acceleration line and the 1-3 line is probably the halfway mark to a larger move lower. Multiple touches of the line means the acceleration isn't happening.

Looks good. First target I see is the Andrew's line (grey in middle), next the yellow WW line. Price formed a symmetrical triangle over the past few days (thin blue lines), breaking of the green line is further confirmation. Damn, look at the US dollar go! As gold drops... Euro falling, Canadian $ and BP also, yen stays strong..

Regarding your first statement, you are right, there are tons of variations of the WW. The pattern works for a reason, and as you understand that and see why it works, you will be able to isolate the good ones and toss out the bad. It aint easy and there are losers, but with patience and risk control its a solid way to trade - good risk reward profile. For your question - Well, that's where your risk management and trade entry comes in. If you are a visual trader, you may want to at least wait for a downward sloping trendline to break. What you should see as point #5 breaks is as I mentioned before, the action around the 1-3 line. This is an acceleration line. If the pattern is not valid, price should quickly move away from the line, with an attempt to retest from below. If you start getting this volatile sideways chop (as with this pattern) there is a good chance the thing will start working, but first it has to catch everyone off - guard. Could happen today....

I think you would need at least 500 data points... but what is most important is how it acts real time, going forward. The idea has to work in various market conditions also.

Tasuki, On your chart, points 1 and 3 should be connected. Point 5 is a violation of this line, it should at least touch it or the pattern is invalid. I think that the pattern in the stock indices is still valid, but has not yet signaled an entry. There is a lot of volatility here, the purple line on my chart is a point where price should either accelerate to the downside, or reject and begin a move higher. It is an inflection point according to channel trading. When the market moves below the 1-3 line too far, the corresponding target moves in the same direction. Unless price jumps quickly the other way. In that case it will often overshoot it's target, as it did the 1-3 line. In the last chart an important point to note is that the #3 point should be lower than your #1 point, which would make the #5 point below the #3 point. Keep throwing out ideas!

could you post a chart of how you see it?

I don't know of any stats, but observing them they work with a high probability - IF - the trade is managed well. Same with pitchforks. It's hard to quantify just like pitchforks, since there are various entries/exits that can be used. Personally, the way I am handling it is by biasing a mechanical system I run to the upside, when above the trigger line. If I was trading with discretion, I would wait for the trendline break to put on an initial position. Then I would add to that on a pullback. So if I personally was trading this pattern with discretion, I wouldn't be in yet till that TL breaks. It could still very well work, but the best place to be currently, as far as this trade goes, is cash. This market is oversold and due for a bounce regardless. I respect Tim Morge's work quite a bit, but I don't think you can quantify pitchforks that well, they are pretty subjective. If I had to choose 2 methods to trade with discretion, I would use the WW for ranges, and the pitchfork for swinging/trending markets. The most critical thing is risk/trade management by scaling in/out, using multiple time frames.. etc..

"Key level will be 782 tomorrow." I wrote yesterday. It closed on it today exactly. This could be a major turning pt. in the market since ER2 has been lagging for quite some time. The Russell index of smaller cap stocks usually leads the market into a new move. We want to see some major strength quickly tomorrow, buyers with conviction, to validate this pattern. A cross of the light green line would be a good conservative entry. The first target would be the andrew's line (dark cyan). The WW target is the 1-4 line, which would basically be the top of the range.

Tasuki, I would say yes on your chart, it's a good one. But I would have taken the #1 point as that little pivot low b/w your point one and two. The gap down tomorrow will either be a pretty evil continuation gap, and likely the 50% pt. of a whole new leg lower testing august lows, or it will gap down and be bought, forming an engulfing pattern on the day. Either way it is an inflection pt. There is some evidence supporting a range and a move higher. 1. There are 2 unfilled gaps above. 2. ER2 began to outperform ES for the first time in quite some time. This is not typical of a declining market. ER2 also began to outperform NQ, which has been extremely strong on a relative basis. In the attached 30 min. period chart, orange line is ES, blue line is ER2 the lines below are a MACD of their relative strength (ER2 vs ES) and the moving average of the RS line. This is an important chart to watch during the day. 3. This area has acted as support in the past. 4. Just looking at the chart - this market has done nothing but go sideways for a whole year. As far as I'm concerned, it's in a range until it's not. In a range you buy spikes into support and sell spikes into resistance. There is some weird inter-market stuff going on - true. That dollar chart just scares the (#$# out of me for some reason. Crude oil getting volatile and toppy looking - or ready to blast parabolic. Interesting markets!

Tradestation, yes 466 tick is nice for ER2. It was perfect, one of those ones you want to 2nd mortgage the house for... Is this WW on the 60 minute chart a perfect storm? Key level will be 782 tomorrow.

whoa... precision of market geometry

I took this one short and exited at the andrew's line. That was fine for me, we'll see if it hits the WW target...

Here's one intraday, this low should hold if the pattern is true - --

The stop would be below point 5 yes. Your chart is good, but I placed my point #1 at the low on the 25th. The reason why is that this is where the move higher began after breaking out of a range. Also it is at 50% of the entire move higher. The pattern seems to be activating nicely. Since the target is so much higher, a conservative approach would be to put on 1/2 here and another half on a trendline break higher. I would say the actual target will be more like 845-850 or more as time passes. That's about 60 points, or $6000 per contract. Wow. You know, we're not the only ones watching this, I guarantee. It could be a rough ride higher.

check out my post on "wolfe" thread to see an interesting pattern..

I think it might be making a move at it, the chop down around 790 is a good indication of the market trying to shake out abunch of participants. I don't see the market going below 775 if the pattern is valid. Most likely the target is about 781. This could be setting up a big up day for tomorrow if the pattern holds.