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DAvid,

from a strictly technical point, you are probably right. Everyone already used pivot points to find fib. entrances, gartley, triangles, etc. etc. The search for the holy grail goes on, eh?

Meanwhile as we know, chart reading is an art, not a science. It's in the eye of the beholder. Is ww the one pattern to trade? no, I don't think so. I don't trade it, but I trade maybe 5% discretionary..

The idea here David is that there is geometry in the markets based on psychology. WW is just one pattern, and like triangles/wedges/head and shoulders, if it is coded with the proper money management it might be mildly profitable.

If you are able to "see" what is going on under the pattern and trade it discretionarily, then you could kill with patterns like this. As OAC said, it's all about the context, and unfortunately our computers can't see patterns the same way a human does.

I can't say I have the time to search out these patterns, and I don't like to trade what I can't quantify. So for me WW is just fun to watch.

You'd be amazed how many do work!

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Looks like a good one mkp. It'll take a while to play out, but should be a good study. WWs are usually best within a range, and there could be a case for callling this trend, still that's a good target..

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OK, waveslider, I just finished this thread. Thanks again for starting it. I really enjoyed it and will be looking for WWs and hopefully finding some.

 

I don't know if this is possible, but maybe you can write down the basics (or even do a video) and you as the thread starter may be able to edit your first post to where I and others can always go to to refresh our memory on the main things to look for in a WW. If you can't edit the first post, a mod should be able to.

 

For example, these are things I picked up from this thread:

- the 1-3-5 and 2-4 are ideally horizontal or close to.

- in a bullish WW, point 3 is ideally lower than point 1, (which sort of negates the above - lol) and vice-versa.

- point 5 ideally breaks through the 1-3 line.

- point one is part of a range.

- symmetry

- point 4 should revisit the range of 1-2 (this I picked up from here)

- there is another point I can't remember exactly. Point 2 needs to be a (relatively) new hi/low. ??

 

Also, volume-related (copy and paste from Duzzntmttr, which you seemed to agree with) things to look for:

1. Point 1 should be the lowest volume of all points.

2. point 2 will have the highest volume.

3. Point 3 's volume will be higher than 1 but less than 2

4.

5. Point 5 's volume will also be higher than average.

 

Also a few charts of "picture-perfect" WWs would be nice in the first post.

 

Ok, now some questions of mine:

1. I am having a hard time figuring out where to place point 1. How far to the left do I need to llok to see if we are in a range?

 

2. You said earlier: "It really only works in a consolidation phase of the market. I believe point one is supposed to be the first pivot in the range, then point 2 is an attempt at a new high/low, which would fail (confirming range), then point 3 is a low below point 1 which also fails..."

So point 1 should be the beginning of the range? Am I also understanding correctly that most of the time the pattern will go in the direction of the trend (trend which was in place before the range started)?

 

3. You said : "5 and 2 are where to watch for big volume.

"

Does that mean we want big volume at 2 and 5?

 

Thank you very much,

Bert

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  bertg said:

Ok, now some questions of mine:

1. I am having a hard time figuring out where to place point 1. How far to the left do I need to llok to see if we are in a range?

 

2. You said earlier: "It really only works in a consolidation phase of the market. I believe point one is supposed to be the first pivot in the range, then point 2 is an attempt at a new high/low, which would fail (confirming range), then point 3 is a low below point 1 which also fails..."

So point 1 should be the beginning of the range? Am I also understanding correctly that most of the time the pattern will go in the direction of the trend (trend which was in place before the range started)?

 

3. You said : "5 and 2 are where to watch for big volume.

"

Does that mean we want big volume at 2 and 5?

 

Thank you very much,

Bert

 

 

Hi Bert,

 

1. point 1 is harder to locate, look first for point #2. It should be dramatic, sharp, with volume. There should be traders getting shook out.

 

2. point 1 is within the range, usually around the 50% level. Not necessarily the beginning of the range, but at a point where volatility begins to expand.

Yes the trend on the higher time frame dominates (if there is one)

 

3. You are correct.

 

There are some web sites out there that detail this stuff, some are more accurate than others. You will only start getting this from seeing them real time and making note.

 

You really juiced this thread - as you noticed, there was no structure, it just kind of rambles forward. I am not an instructor, nor do I have time or energy to put together what you are asking..sorry! But I am glad you have learned a bit. There is a bit of work to learning market geometry, but it is valuable knowledge..

MyScreenHunter.thumb.jpg.2440770db7e55b08f2253c0d5b7318e3.jpg

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  waveslider said:
Hi Bert,

2. point 1 is within the range, usually around the 50% level.

 

waveslider,

 

Thank you very much for your answers.

 

By the above quote, do you mean:

50% area of the range itself

or

50% from the previous swing low to what is now point 2 (2 being the high, assuming we are looking at a bullosh WW)?

 

Thank you,

Bert

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  bertg said:
OK, waveslider, I just finished this thread. Thanks again for starting it. I really enjoyed it and will be looking for WWs and hopefully finding some.

 

Bert

 

Ahah ! I didn't realize it but you are the same guy who was spreading the crash rumors on the other thread. :o Yesterday's price action prior to the "2 pm crash" that you were addressing was a "three Little Indian" formation. Have you read Linda Rasche's book on this pattern ?

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  OAC said:
Ahah ! I didn't realize it but you are the same guy who was spreading the crash rumors on the other thread. :o Yesterday's price action prior to the "2 pm crash" that you were addressing was a "three Little Indian" formation. Have you read Linda Rasche's book on this pattern ?

 

Since we're all about training and knowledge here, how about disabusing our fellow trader of the notation that yesterday's retracement was "a crash".

 

Words do matter. This was not a crash.

 

-fs

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  OAC said:
Ahah ! I didn't realize it but you are the same guy who was spreading the crash rumors on the other thread. :o Yesterday's price action prior to the "2 pm crash" that you were addressing was a "three Little Indian" formation. Have you read Linda Rasche's book on this pattern ?

 

no problem.

 

In any case, no I haven't. I've heard of it, "Streesmarts," I think it's called.

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ok, I drew this last night. It was way too late and I didn't have the screen capture program installed.

 

Today target was almost hit. It's a 15-min $INDU chart.

 

what do you guys think? was point 5 way too high above the 1-3 line? In Wolfe's website he has a chart where point 5 is quite a bit higher than the 1-3 line.

 

Cheers,

Bert

 

attachment.php?attachmentid=6583&stc=1&d=1211333687

indu_15m_051908.thumb.png.094738e65fff8a4ea6c76f4f56c28b5c.png

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  Tasuki said:
OAC, please explain for us what you mean by "converge". Thanks, Taz

 

If you extend line 2-4 and 1-3 into the future, they will intersect.

Sorry for the confusion, but it is right out of Bill Wolfe's book. Think of it as two drunken sailors running into each other. :)

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  OAC said:
If you extend line 2-4 and 1-3 into the future, they will intersect.

Sorry for the confusion, but it is right out of Bill Wolfe's book. Think of it as two drunken sailors running into each other. :)

 

Ah yes, I see what you mean. This is the ETA line, and as Waveslider has correctly pointed out much earlier in this thread, that line doesn't always work out. In fact, my experience is that one should mostly ignore it. Perhaps it is necessary for a proper "Wolfe" wave---since Bill Wolfe discovered it I guess he can make any rules he likes, but I think the rules for the psychology of the pattern suggest that one should be a little flexible with the construction of the wave, Wolfe or not.

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  Tasuki said:
Perhaps it is necessary for a proper "Wolfe" wave---since Bill Wolfe discovered it I guess he can make any rules he likes, but I think the rules for the psychology of the pattern suggest that one should be a little flexible with the construction of the wave, Wolfe or not.

 

Can I make the assumption that you are not going to shell out $3000.00 USD for his course of instructions ?

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Interesting stuff going on in the markets. Everyone is sooo eager to jump in and short, the move up was done on such OBVIOUSLY low volume..

 

But what we've seen is these expansion patterns suggesting volatility is increasing.

 

The point I'd like to make is regarding the inter-market relationships between mid-caps and small caps vs. the S&P.

 

I know this is slightly off topic of wolfe waves, but I'll bring her back around..

 

Check this chart and notice that on this last move higher, the RUT is showing relative strength to the SPX. The MACD of this relationship is trending higher. Today in particular, small caps were outperforming.

 

Small caps are usually the first to go in a sell off, as the flight to quality moves money to big cap dividend payers.

 

Looking at the difference between the Russell and the other indices is striking.. This is a major red flag folks.

 

There was a lot of volume in all markets this afternoon, and while the Russell is in a confirmed downward sloping channel (red), there is a potential WW here. I am using a slightly modified 1-4 line as I believe the spike through it was a distortion. I like to use trendline points that have low volatility.

 

The 1-3 line is a point where the market should have accelerated even further. It might be a little early to call this a buying op, my systems are saying buy.

 

Comments>?

MyScreenHunter.thumb.jpg.524ff72167b636b56bea2abc69007314.jpg

MyScreenHunter2.thumb.jpg.98cfa822193029ee1b2fe5dffa044ba8.jpg

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  waveslider said:
Interesting stuff going on in the markets. Everyone is sooo eager to jump in and short,

 

 

 

Everyone was eager because the Fed came out at 2pm EST and spooked the market by hinting no more rate cut and possible rate hike is coming soon due to dramatic pickup in inflation

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but isn't that almost certainly priced into the market by now? Seems like it has been discussed quite a bit. There is the possibility of bigger players taking out stops. Highest volume today in almost 2 months.

Nice steep channel created a great short trade today, hope some of you caught that...

Wonder if that was a capitulation, or just the start of the action?

Check this out - 2 wide range bars right in the same spot. Wonder what that means? Where are the candle junkies?

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  waveslider said:
but isn't that almost certainly priced into the market by now?

 

I guess you don't look at the intrady tick charts. Like 200 ticks or less ? ;)

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  OAC said:
I guess you don't look at the intrady tick charts. Like 200 ticks or less ? ;)

 

There is a lot of Wolfe Waves on the intraday tick charts, sometimes 3 or 4 in a single day ! Lets say you only look at 60 minute charts or higher. You are lucky to see a handful in a month. So in the course of a year, guess who is going to be more proficient ?

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Ha ha ! (I look at 300 tick) Good point, and the market will do whatever it does - whenever it wants for whatever reason. Usually to make the majority lose money!

It was time for volatility to start cycling back into this market. It's starting to get interesting again.

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OAC - -> # of trade opportunities doesn't necessarily = trade profits!;). Right?

I trade off of 10 minute charts and daily charts, and I hedge using QLD on the 300 and 900 tick. I don't even trade WWs, but I do watch them to understand market structure.

 

When you say proficiency with WWs as far as experience - you're rite about quantity of trading. Personally, when I overtrade I lose money. I also get into some weird kinda mesmerization... I prefer to relax and let the opportunities come on the higher time frames, then zero in. You know? But if you can watch those tick patterns form on the low time frames, you must like the adrenaline.

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