Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.

Recommended Posts

Is anyone familiar with the wolfe wave?

 

The YM and NQ are showing pretty classic examples.

 

Here is a daily chart of YM, the up-trending blue line is the target line.

 

This is a high probability pattern in a ranging market, which YM certainly is in after the expanding pattern over the past 2 months.

 

If you are not familiar with the wolfe wave, google it - it is an effective pattern that happens frequently.

 

Any comments?

Wolfe.jpg.13c84a291f51726862ff5d5c88f3f5d1.jpg

Share this post


Link to post
Share on other sites

nice, compare this chart to the bottom of pg 123 of Street Smarts book... they are basically identical. buy the reversal with a stop under this low is the trading strategy associated with it.

Share this post


Link to post
Share on other sites

Yeah it's a 12345 with the target line connecting 1 and 4. I think Rasche called it 3 indians, but bill wolfe coined the pattern originally. His site might be the best place to investigate it.

Understanding how this pattern works, the dynamics behind it, can spark some really interesting insights on how markets work.

This is a killer trade when it sets up.

Share this post


Link to post
Share on other sites

I still don't get it, the pivot 3-4 from the chart must be in the channel. There is no channel unless 2 lows and 2 highs are made. So 1 & 3 must exist to draw a line, so does 2 & 4. I got this rule from investopedia but does't make sense. I think this pattern is classified are broadening pattern in the classical TA.

Share this post


Link to post
Share on other sites

Torero, google "wolfe wave" to learn the pattern. Technically I would call it a descending wedge.

 

Point 2 is the recent high. Point five is the bar from friday, which penetrated the 1-3 line.

 

The target line is 1-4. Sorry, I should have labeled this chart better.

Share this post


Link to post
Share on other sites
When you start looking for these, they appear all over. ER2 just completed one, check it out....

 

Line 1-4 is the target line

 

Ok, I see it. In classical TS, this is a rising wedge which usually means a quick bearish drop is imminent (if you draw the line from point 2 through point 4 along with 1 through 3, you'll see the wedge). This wedge has a target of going back to point 2. This is all in Edwards and Magee's book, very well explained.

Share this post


Link to post
Share on other sites

Torero, you are correct about the rising wedge. Wolfe goes deeper than the wedge though. What happens is that the rising wedge is rejected and the market creates a target for itself when the geometry gets skewed.

 

I am not the best instructor, but there is info out there on this pattern. If you are a visually oriented trader, this is a very valuable pattern to know.

Guarantee you the professionals see this, it is a contrarian pattern so creates a quick and powerful move.

 

The trick is to be able to see it developing as it happens.

 

Here is another guy who sees it and understands. Bill Wolfe doesn't use fibs, and I don't think you need to either.

http://blog.fxinstructor.com/august-1-2007-ny-live-trading-room-summary/

 

Go to Bill Wolfe's site to learn the pattern, if you google you will find it.

 

If YM holds this morning's lows (and the 1-3 line), then this pattern is set to run. The target is a good 800 points higher. Closing above today's open would be a good first confirmation, above Friday's high would be another.

 

The weekly ER2 chart I posted shows the power of this pattern as it is completed! Target hit perfectly. In consolidation patterns you start seeing these all over the place...

Share this post


Link to post
Share on other sites
Ok, I see it. In classical TS, this is a rising wedge which usually means a quick bearish drop is imminent (if you draw the line from point 2 through point 4 along with 1 through 3, you'll see the wedge). This wedge has a target of going back to point 2. This is all in Edwards and Magee's book, very well explained.

 

 

And if you want to sprinkle in some Elliott Wave into this...

 

the rising wedge will only appear at the end of the 5th wave. If you're in the 5th wave and you start seeing overlapping subwaves, this is where doing the Wolfe projections can really pay off. These subwaves will only be 3 wave patterns...thus all the overlapping. Like you said, the drop that occurs after a rising wedge can be very sharp and quick.

Share this post


Link to post
Share on other sites

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....

 

Basically it is a pattern whipsawing a lot of people, the more the better.

 

When there is momentum in a market, like there is here, the range is broken and price inverts into a larger wave rather than staying in a range.

Share this post


Link to post
Share on other sites

Here's another one that I was watching in the RUT. Pretty shallow but effective.

 

There are some important rules for this trade, but if they are satisfied the % profitable is very good. Best used in a non trending market.

 

#5 was the fakeout/failure

 

Connecting a line between #1 and #4 gave the target

5aa70e01bb89f_WWRussell2k.jpg.85df35c2a16bc484f6f0836b30b6a53d.jpg

Share this post


Link to post
Share on other sites

If my understanding is correct point 5 can be outside the 1-3 line (even preferable). If that is the case do you wait for some trigger (reversal bar or something) to confirm point 5 and enter?

 

Cheers.

Share this post


Link to post
Share on other sites

Here's one I just took in ES. This is a 3 min chart.

 

The one point was a little tricky to notice. The important thing to note is that the 1 pt. occurred in congestion. It was actually an inverse point, the momentum that broke out of the contracting pattern started wave 1.

 

The target line was drawn between pts. 1 and 4. The trigger line was drawn using pts. 1 and 3. Entry was near pt. 5. If you just took a breakout it was worth 2 pts.

 

I took this trade because of a variety of factors; Lack of intraday trend, ER2 under-performance indicated that an uptrend was unlikely, range would continue. If you look at the volume on the bars I circled, you can tell the story and see where people got psyched out.

 

Probably would have been good to watch the TICK or TIKI to look for extremes.

 

Again, you had to have a trained eye to catch that pt. #1. Looking at balance and wave dynamics helps.

Wolfe1029.jpg.8acab460b007ed7ad1542492c49e4c89.jpg

Share this post


Link to post
Share on other sites

I think I have had a mini :lightbulb: moment. (Where's the bulb emoticon when you need it). Just kind of ties in with a couple of things that I had observed for myself and had even started to trade. I love market geometry its just so cool (when it works). Wouldn't mind seeing the odd failure too, lots to be leant from them.

 

Cheers.

 

EDIT: Yes the 1 point is kind of tricky

Share this post


Link to post
Share on other sites

Just for fun I drew a couple of lines from what to my eye where more obvious potential one points. (bear in mind I am a chanell man at heart) Both 'work' but give an overshoot on 5. Am I right in thinking overshooting 5 is allowable and actually quite desirable?

 

Any comments on the other potential 1's?

 

Cheers.

Share this post


Link to post
Share on other sites

Ah ha! you have a pretty good grasp on market geometry! What you have identified is a balance point that those lines are shooting through.

Your point #1 is equally valid, I was being conservative with my point#1. In essence, my point#1 gave the first target, the other 2 you had were the next targets.

Personal preference note:

My 1-3 line was downward sloping for a bullish target. I like these wedge failures.

 

Do you use Andrew's lines, Blowfish?

 

Also - there's a great book on channelling by a guy named M. Parsons called Channel-Surfing. A cheesy cover but very good book.

Share this post


Link to post
Share on other sites

hey guys,

 

I am new to this posting thing so please bear with me if I don't get it quite right the first time (trying to become a reformed 'lurker').

 

I am very intrigued by Wolfe Waves, and been trying to learn about them for the past few days. I would like to post a 4 minute chart on todays YM. The 4 minute TF is new for me (usually use 1 & 2 min), but wanted to try something new - swings instead of scalps maybe. I drew this WW in real time on the 1120 (central) bar. As indicated on the chart, 13840 looked like a good entry so I entered a limit order at that level. Based on the WW that I drew, I realize that looks to be a bit early/high, however, it looked like I would only take about 9-10 ticks of heat on the failure of this pattern. As it turned out, it missed me by 2 ticks, no big deal as I was happy that I was able to see this in real time and it appeared to be a valid pattern to me, UNLESS....my perceptions on this particular chart are completely wrong.

 

I have some limited experience with various markets but I consider myself a beginner at trading and I would be grateful for any feedback on this.

 

Thank you very much,

VV

5aa70e17b98e2_YM12-0710_30_2007(4Min).thumb.jpg.2baed54413f15aa1eed65d77864ff25a.jpg

Share this post


Link to post
Share on other sites

There was a pattern here, but unfortunately you didn't see it according to the chart you posted.

 

If you use a conservative entry, the trade was not activated since the cyan line went unbroken. If you fade the entry this was a pattern failure.

 

It was a pretty ugly one all around. If point 5 would have appeared a little earlier it probably would have worked. The target line was the line connecting 1 and 4.

 

I advise you to go to wolfe's website and study the pattern again.

5aa70e17be18c_YMon1030.jpg.c1bb2230c525ec64fc5ed8e46fb631c3.jpg

Share this post


Link to post
Share on other sites

I used to use pitchforks a year or two back they are a phenomenal tool. In the end I went back to using plain old hand drawn lines - channels in particular. They just 'speak to me' more i think.

 

Vae I wont comment on Wolfe as all I know is what I have read that is freely available. The thing is once you start to see geometry its everywhere, Then the tools don't matter so much its just a question of using them consistently.

 

You mention balance points Wave, ....ever come across a guy called Michael Parsons?

Share this post


Link to post
Share on other sites

Parsons is an good guy and hard working teacher. He has an excellent book on channel trading which I would recommend to any visual type trader...

 

Potential pattern developing in ER2. A volatile reversal off of the magenta line would spell a move to the yellow line. Lowered volatility and drifting lower means the pattern is not valid and a move lower to about 772. Blue line is currently support. I'll post this same chart later to see how it all works out.

 

The lines below are just volume and a jurik MA of volume.

5aa70e1887722_ER2potentialWW.thumb.jpg.6e3b50b35f0a02ab6d62d7d29f391fa7.jpg

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Topics

  • Posts

    • Date : 14th October 2019. MACRO EVENTS & NEWS OF 14th October 2019.No-deal Brexit risks are looking more real than ever, with reports suggesting that talks will officially break down this week ahead of the upcoming EU summit on 17 and 18 October. Elsewhere, further US data and Fedspeak could provide more clues about the possibility of a Fed rate cut. Tuesday – 15 October 2019 Consumer Price Index (CNY, GMT 01:30) – September’s Chinese CPI is seen unchanged at 0.7% while the PPI figure is expected to decline further to -1.2%. The overall reading for CPI is estimated to post a gain up to 2.9% y/y. ILO & Average Earnings Index 3m/y (GBP, GMT 08:30) – UK Earnings with the bonus-excluded figure are expected to slip to 3.7% y/y in the three months to August, down from 3.8%y/y. UK ILO unemployment is expected steady at 3.8%, which was the lowest rate seen since December 1974. ZEW Economic Sentiment (EUR, GMT 09:00) – Economic Sentiment for October is projected at -27 from the -22.5 seen last month, as the current conditions indicator for Germany turned negative. The overall Eurozone reading though expected to declne further to -33.0 slightly from -22.4. A lower than expected outcome, ties in with the stagnation in market sentiment at the start of the month. Consumer Price Index (NZD, GMT 21:45) – One of the most important figures for FX markets, the y/y CPI for Q3 is expected to come out at 1.4%, compared to 1.7% in the previous quarter. Wednesday – 16 October 2019 Consumer Price Index (GBP, GMT 08:30) – The UK CPI is expected to rebound to a 1.8% y/y rate in September after dipping to 1.7% in August from 2.1% in July. Weakness in sterling from year-go levels should impact some offset to disinflationary forces. Consumer Price Index (EUR, GMT 09:00) – The Euro Area CPI is expected to be confirmed at just 0.9% y/y in the final release for September, although the deceleration in the headline rate over the month was largely due to base effects from energy prices, with core inflation actually moving up to 1.0% y/y from 0.9% y/y in August. Consumer Price Index (CAD, GMT 12:30) – The Canadian CPI index is expected to have increased to 2%y/y compared to 1.9%y/y in August. The core CPI measures remained near 2.0%. Retail Sales (USD, GMT 12:30) – Retail Sales are an important determinant of consumer spending thus making it a leading indicator for overall economic growth. Consensus expectations suggest that we should have increased by 0.2% in September, for both the retail sales headline and the ex-auto figure, following a 0.4% August headline rise with a flat ex-auto figure. Fedspeak: Fed Brainard (USD, GMT 19:00) Thursday – 17 October 2019 European Council Summit on Brexit Employment Data (AUD, GMT 01:30) – While the Unemployment Rate is projected to have flipped at 5.3% in September, Employment change is expected to have eased, increasing by 10K compared to 34.7K last month. Retail Sales ex Fuel (GBP, GMT 08:30) – Retail Sales in the UK are anticipated to increase in September, reaching 3.0% on a y/y basis, and 0.5% on a m/m basis, from the 2.7% and -0.2% respectively Housing Data and Building Permits (USD, GMT 12:30) – Housing starts should drop back to a 1.282 mln pace in September, after a sharp rise to a 1.364 mln clip in August with the help of lower mortgage rates. Permits similarly are expected to slow to 1.370 mln in September, after popping to 1.425 mln in September. Permits have shown a solid growth path into Q3 despite a July starts set-back. Philadelphia Fed Manufacturing Survey (USD, GMT 12:30) – The Philly Fed index is seen falling to 7.0 from 12.0 in September, versus a 1-year high of 21.8 in July and a 33-month low of -4.1 in February. The late-September producer sentiment surveys deteriorated significantly after firmness in the early-September reports, and the early-October data will be closely scrutinized to see if this pull-back continued. The “soft data” surveys are at risk of a possible impact from the UAW-GM strike, alongside the ongoing headwind from troubles abroad. Fedspeak: Fed Bowman and Fed Williams (USD, GMT 18:00 and 20:20) Friday – 18 October 2019 European Council Summit on Brexit China Gross Domestic Product (CNY, GMT 02:00)- Chinese GDP is projected to see additional moderation to a 6.1% y/y pace in Q3, from 6.2% in Q2. Industrial Production and Retail Sales (CNY, GMT 02:00) – The September industrial production is forecast at 4.5% y/y from 4.4% previously, while September retail sales likely improved to 7.7% y/y from 7.5%. Fedspeak: Fed Kaplan and Fed Clarida (USD, GMT 15:00 and 15:30) Always trade with strict risk management. Your capital is the single most important aspect of your trading business. Please note that times displayed based on local time zone and are from time of writing this report. Click HERE to access the full HotForex Economic calendar. Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE! Click HERE to READ more Market news. Andria Pichidi Market Analyst HotForex Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • This should really be very easy, but I can't find an article or video to walk me through it. I picked 20 ticker symbols where the stocks are in a tight trading range. I got them all into one list I call "Channel". I'd like to add several indicators that apply to all, such as MACD, volume, 3 moving averages. Then I'd like to scroll through the list, adding trendlines, or horizontal lines to mark the top & bottom of the price channel for each. Then set an alarm for a breakout in each direction that indicates a breakout. Could you point me to an article or video that walks me through how to do this? ...or give me the steps? Thank you, RichardV2, Experienced stock trader back before the Internet was invented.😁
    • The Economic Proscription of U.S. Farmers by China Maybe Forever   Similar to a black eye on the face, it’s placing an indelible imprint. The retaliatory levies by China over U.S. commodity producers, such as soybeans, which seem to be forever. The moment such happens for the market it becomes irreversible.   It’s a dread numerous farmers from North Dakota to Mississippi have recognized for as far back as last year. They worry that they’ve put millions in soybean development on account of China. Since Chinese focus is now transferred towards Brazil rather, that market might be gone forever.   Once the confidence merchants have in the U.S. declines as a steady provider because of the trade dispute, the more vital its important for them to support and further broaden other avenues.   The developing danger for American agribusiness presently is that a great part of the piece of the overall industry lost throughout the year will be hard or difficult to win back at any point shortly, the Boston Consulting Group said in a detailed analysis discharged on Wednesday.   This is for the most part because of long term contracts that are regularly recorded among purchasers and sellers, contingent upon the item. The lesson from the analysis shows that U.S. farmers need to turn out to be less reliant on China, and simply trust in the best concerning those customers organizing a rebound sooner or later.   For the time being, China is going to Australia, Brazil, New Zealand, Russia, and also for its domestic producers as an option in contrast to American developed crops and animal proteins.   From the detailed analysis: “The risk that U.S. agribusinesses may for all time lose foreign market share of the overall industry isn’t only hypothetical. In past trade disputes, for example, one with China including beef, the US has not recaptured its lost share. As a result of the increase of U.S. crops and food materials more costly than other choices, high duties bring down the price to merchants who plan to expand. Also, the fewer confidence merchants have in the US as a steady provider, in perspective on the potential for future trade disputes, the more important it progresses toward becoming for them to support and further expand. After some time, merchants could loosen up complex associations with suppliers from the U.S.”   China Receives Blames for the Pressure And this is so because China is important to American farmers. China purchased $19.5 billion in U.S. agricultural items as of 2017, representing 14% of exports of farm produce, in light of BCS analysis. In July 2018, China slammed a 25% levy on U.S. agricultural items.   Exports at that point declined by an incredible 53% for the year. While exports to China have declined also for this year, over past years free fall.   There is another motivation behind why some China customers may not come back to the U.S. China is extending its very own crop acreage, particularly for soybeans. After some time, China will turn out to be progressively independent. Except if request increases generously, China will purchase its very own soybeans, regulating export development and under control in any case.   “Individuals in the business were in a condition of cheerfulness, believing that a bargain would soon be reached,” says Michael McAdoo, associate, and related executive for BCS in Montreal. “Our analysis demonstrates that regardless of whether there is a bargain, there is worry that a similar volume won’t return. They need to try different markets,” he declared.   Source: https://learn2.trade 
    • Trade Dispute Responsible for China’s Overwhelming Gold Purchase Rate   China has included more than 100 tons of gold to its stores since it continued purchasing in December, fortifying its position as one of the significant authority collectors as national banks load up on the valuable metal.   The People’s Bank of China grabbed progressively gold a month ago, raising reserves to 62.64 million ounces in September from 62.45 million in August, as per information on its site. In tonnage terms, the most recent inflow sums 5.9 tons and comes in as an expansion of about 99.8 tons over the earlier nine months.   Bullion hit the most noteworthy in over six years in September as more slow development, the trade dispute and rate reductions prodded financial specialist request. National banks have been significant purchasers as well, particularly in developing markets. Administrative demands will probably proceed as protectionist strategies and geopolitical concerns add to the request, as forecasted by Suki Cooper, the valuable metals investigator at Standard Chartered Bank.   “With the stressed partnerships with the U.S., China requires support against its enormous possessions of the dollar, and gold serves that capacity,” said Howie Lee, a financial specialist at Singapore-based Oversea-Chinese Banking Corp. “As China turns into a superpower in its very own right, I anticipate progressively gold-purchases.”   China’s High Gold Appetite The PBOC’s continuos running of bullion-purchasing has come against the difficult setting of the trade dispute with the U.S. furthermore, a stamped lull in development at home. While high-level discussions are set to continue in Washington this week, Chinese authorities are flagging they’re progressively hesitant to consent to an expansive bargain.   Spot gold spiked to as much as 0.4% to $1,511.31 an ounce on Monday and exchanged at $1,505.84 in early London exchange. While the value declined 3.2% in September, they remain high at 17% this year. The PBOC information was discharged at the end of the week. Alongside China, Russia has additionally been including generous amounts of bullion. In the initial half-year, national banks overall got 374.1 tons, supporting the overall gold request to a three-year high, the World Gold Council declared.   While a tenth straight month of amassing, shows an unfaltering purchasing trend for the PBOC, China has in the past gone for significant stretches without uncovering moves for its gold possessions. At the point the national bank declared a 57% bounce in savings to 53.3 million ounces in mid-2015, that was the first update in quite a while.   Source: https://learn2.trade   
    • GBPJPY Reverses Its Sell-Off Around the Level at 130.75  OCTOBER 9, 2019  Azeez Mustapha  No Comments   GBPJPY Price Analysis – October 9 In the prior session, the pair closed lower for the second day in a row, but currently, the GBPJPY displays a weakness further downside of the pair while retaining its wider medium-term outlook by temporal reversal on the level at 130.75.   Key Levels Resistance Levels: 148.66, 137.80, 135.774 Support Levels: 130.75, 128.68, 126.54   GBPJPY Long term Trend: Bearish In the bigger picture, the GBPJPY consolidation structure is still forming from the technical support zone on the level at 126.54 low.   A further upward move may be recorded towards the level at 146.57 and 148.66 in an extension where its resistance is glaring before completing the structure. However, the overall trend remains bearish while displaying an intact downtrend in the medium and long-term.   GBPJPY Short term Trend: Bearish On the 4-hour time frame, its price is trading narrowly between the moving average 5 and 13 close to the key technical support level at 130.44.   As it is presently, the intraday bias in GBPJPY remains on the downside at this point where a corrective rebound from the level at 126.54 low should have completed. Meanwhile, its 4-hour RSI is bearish and pointing lower suggesting further weakness.   Source: https://learn2.trade 
×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.