Wolfe

[waveslider 10]

yes bubba you identified a kind of fractal in the market currently. The problem with matching the current pattern as a wolfe wave is that if the 1-3 line is successfully broken, then you have a double bottom and an imminent move higher. That's why the 1-3 line should rise for a bearish pattern, opposite for bullish.

There is more to it than that of course, but the case for the opposite scenario should always be considered.

You asked how I trade this pattern earlier and I hadn't responded - am travelling.. I don't trade this pattern specifically.

 

I am a mechanical system trader primarily but enjoy pattern trading. When I have the luxury of time and money on my side, I will likely trade market geometry. For the time being I trade my money and my client's money in a statistically proven manner (very little human emotional intervention). It works for me.

[bubba 10]

thanks ws - yes, the pattern isn't quite up to specs. just looked interesting. the 'best' formation prolly was the bullish pattern(wasn't marked). and thanks for the clarification , much appreciated. i spend countless hours on mechanical

systems and hope to someday have a few up and running live. i still have hope of identifying a few setups for daytrading. the ww looks like something i might could use.

[waveslider 10]

233 tick ES chart WW

[waveslider 10]

This one was easy to see early on, the #2 was dramatic, move from 4-5 quick and dramatic.

[waveslider 10]

WW is perfect for day-trading range days. You just need one of these a day to make a living. Problem is being able to watch multiple markets for them. I trade 9 markets mechanically, so am periodically monitoring them all, but if you were just watching one, I imagine it would be like watching the paint dry.

 

Mechanical trading gives you incredible peace of mind. If you keep spending the hours you will find something that works. Just remember that simple is better, and to stay away from any type of modify-able parameters.

 

Today I am leaving my systems on and going surfing! later!

[thrunner 10]

leaving my systems on and going surfing! later!

I hope no one got wiped out by this Ww failure this PM

 

[bubba 10]

lol runner, i was all over that 1!

i was lucky to capture a tick or 2 before it failed.

[Tasuki 10]

th, bubba and all,

Why (oh why?) did that beautiful bullish WW fail? Because you're not thinking about the psychology of the trade. In a true bullish WW, point #2 should entice the breakout suckers to go long (at exactly the wrong time). Well, when this point #2 arrived, it was almost ready to close the gap from yesterday. Would any damn fool breakout trader go long at this point? Hell no, everybody's looking to go short, now that the gap has (almost) closed. In fact, the market was so weak, it couldn't actually make that last little bit to really close the gap. So, while the pattern had the right shape, it didn't fit the psychology of the trade at all. Wolfe Waves are about more than geometry. It's geometry + psychology---when these two come together, then (and only then) do you have a high percentage winning trade.

Cheers, Taz

p.s. the attached chart shows the same trade on a 5 minute chart, to illustrate the gap closure. Hope this helps.

[bubba 10]

good points Tasuki..

it was interesting, no question.

wave five ended up right at a strong support/resistance zone.

and at the bottom of a multi-day channel.

plus, it was near the close on Friday. crazy!

with all that going on - i fully expected that baby to rocket

:o

it's was fun anyways.

[waveslider 10]

ER2 466 tick chart, developing potential.....

[waveslider 10]

conservative entry....

[waveslider 10]

Take one off here at the top of the channel

[bh_trade 10]

Take one off here at the top of the channel

 

 

Good trade Waveslider, top of channel was also developing value area low and a tick in front of the double bottom from earlier in day.

[waveslider 10]

Trade not looking so good any more at this point, has taken out #5 low. Will look to exit at about 750

[waveslider 10]

This has gone and formed a larger pattern. The last trade would have netted break even or a small loss. Let's see how this one goes into the close...

[waveslider 10]

Here's another attempt. The markets are trying to trend lower, maybe they will slam low into the close to attempt a shakeout on the higher time frame. Good longer term buy signal on the daily charts.

[waveslider 10]

The higher time frames are over-riding these short term patterns, trying to shake out longs. That's why this pattern works best in a range. A clue that these weren't going to be slam dunks was the fact that the other markets, like NQ were trending down throughout the day.

That being said, the relative strength of ER2 is a bullish sign for the markets.

On this chart you can see that I applied the andrew's line as a conservative target. When price failed at this line, which coincided with the 2-4 line, it was an exit signal. Markets will likely be gapping up tomorrow.

[waveslider 10]

here's the chart

[bubba 10]

another longer term pattern - ES

[waveslider 10]

ER2 466 tick chart, potential....

 

would rather see the 4-5 wave one single thrust instead of chop..

[waveslider 10]

Nice. about $450 per contract with a conservative entry.

[bubba 10]

nice one WS

here's 1 i watched today .. only watched :doh:

[waveslider 10]

Thanks bubba, yours looks ok, but I don't think I would have taken it since the #2 pt. didn't really fake people into the market. The one you posted a few days ago looked a lot better. Keep em coming.

Today was a classic day for WW since it was a ranging market, couldn't go higher, couldn't go lower.

I suspect this market is going higher, what do you think?

[bubba 10]

i agree on the higher Waveslider.. i can 'see' some bearish wedges on the higher timeframes. i can even make a case for a bearish wedge forming on the ES daily. but our current position is at the bottom of the patterns (or channel) so, up room is there...

[bubba 10]

this one was nice - had a double confirm