Bullish Wolfe Wave Pattern
I just spotted a very nice Wolfe wave pattern. Sadly just right now. But I thought to publish it as education, since it strictly followed the rules.
1. Waves 3-4 must form a channel with wave 1-2
2. Wave 1-2 equals waves 3-4
3. There is regular time between all waves
4. Wave 5 exceeds the trendline created by waves 1 and 3
5. If price rebound above the trendline created by waves 1 and 3 then BUY
6. Sell Limit gets adjusted to an extended trendline that we draw from wave 1 to 4
Wolfe Wave
EDUCATIONAL: Wolfe Wave ExampleHey traders, here is an example of a typical bullish Wolfe Wave setup. Price creates two converging descending trend lines. Point five often overshoots and touches the parallel of the 2-4 line, presenting an entry opportunity. Profit is taken at the 1-4 line. For the bearish setup, the lines must be converging and ascending, and same rules apply. Trade with care and assess your risk!
Wolfe wave explainedNot an analysis, though I used recent price changes in CAC40 to illustrate the idea behind Wolfe Wave. Things are never ideal so it remains a theoretical tool but it can help to find out target levels in case of breakout scenarios from converging triangles. The presented example is a bullish scenario but you can do the same for a bearish scenario if the triangle is pointing upwards, just invert the figure.
There are other subtle things in Wolfe analysis but you get the big picture here.
$USD v. $SEK Lesson #4: Geo Construction & Contingencies #forexFriends,
A with lessons and demonstrations offered over the past 24 hours (See $USDTRY, $NZDJPY, ... etc), here is another pair worth looking into, not so much from the perspective of a pending geometric completion, but as an example of developing a contingency plan.
Here, we are contemplating a short (green scare representing a conservative, prudent entry point, where price BACA < 1-3 Line as its signal) As the Wolfe Wave/Geo would have it, targeting the 1-4 Line comes to sight, and this would be the right thing to consider at this point.
However, there is a slight possibility that Point-5 of the completed geometry might in fact be a dud, and that instead, the higher-high structure that build atop this point may perhaps represent the residence of Point-3, of a larger geometric system.
As a cautionary measure, I would here recommend the trader to look for added confirmation, such as breaking below prior higher lows (for instance, the one at 8.45, and the one slightly above 8.40), with perhaps partial positioning if that fitted your risk tolerance or strategy style) - See following illustration:
Another typical price behavior worth waiting for is the conversion of the 2-4 Line from a support-to-resistance, which means that price would retrace from a decline and hit the underbelly of the formed geometry, offering a validation signal to go short - See suggested dashed pathway in following illustration:
OVERALL:
In any case, figuring out reasonable and sound price behavior ahead of the game is likely to remove some of the uncertainties that come with this and any other markets - For instance, there still remains the uncertainty whether this pair will ignore the completed geometry, and instead internalize it into a large system. Yet, for this scenario, there is already a contingency plan awaiting in the background, using the Geo's internal construction rules (see prior lessons).
See you on this or other revealing threads.
Best,
David Alcindor
Predictive Analysis & Forecasting
Durango, Colorado - USA
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$GBPUSD - Lesson: Adv. Market Geo | $USD $GBP #BOE #forexFollowing is a brief step-wise approach to the refinement I have applied to the Mr. Bill Wolfe's Wolfe Wave (www.WolfeWave.com) pattern.
Although in his introductory site (www.WolfeWave.com), Mr. Wolfe insists that no internal geometries needs to supplement this pattern, my encounter with this pattern came originally from a different angle, having discovered my own proprietary pattern (e.g.: Great White, Janus, Euclid, Alt. Shark), as well as other occult market geometry concepts (nodes, nodules and euclidean modules).
So, I had no other fashion to look into this pattern but through the prisms that I had already been wearing since trading and dissecting market shapes, forms and geometries as I started back in 1997.
Concepts such as "Tunneling", "Geo-Anchor", Point-5 ectopia where simple findings that may or may not reiterate lessons or concepts that Mr. Bill Wolfe has shared in private programs, which I never had the chance nor desire to receive, lest I would lose the biases of my own methodologies.
So, let's delve into yet another discussion of this Wolfe Wave, whose point-by-point, and leg by leg analysis will also include simple Elliott Wave principles and bits and parts of my own geometries, despite the interdictions of Mr. Bill Wolfe who asserts that his pattern stands on its own two lines ... To some extend, I have to agree, but the refinements I have added won't hurt the novice and advance trader screening for optimal, rule-based approaches.
Also, as this price action unfolds, I will probably add new targets based on a separate Predictive/Forecasting Method.
Thank you for your readership and eventual contribution.
Best,
David Alcindor
Predictive Analysis & Forecasting
Durango, Colorado - USA
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Twitter:
4xForecaster
LinkedIn:
David Alcindor
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Deja-Vu: Wolfe Waves In #nikkei | $jpn225 #BOJ #forex $JPYFriends,
Recently, we entertained a lot of conversation on market geometries, more specifically in discreet geometries that easily come to the eyes, and others a bit more buried in the occults. Of late, we spent some time reviewing Wolfe Waves patterns, which offer the pattern trader that "next level" of market geometry complexity, given a set of rules that are really quite simple.
Looking at the Nikkei, I had a sense of deja-vu. In fact, I even had to look up what this French expression would translate into Japanese - Wike says: "dejavyu" - Again, another sense of deja-heard. But it's just me.
The chart itself comes very a-propos considering the topic of market symmetries and now Wolfe Waves, as a near perfect symmetry is setting up over the months ahead.
First, at the bottom right of the chart, a Wolfe Wave (arguably, a Diagonal Triangle of the Ending type for the Ellioticians), completed the prior abysmal descent through a Bullish type of Wolfe Waves pattern ("WW").
That completion was signaled at the point (circled in GREEN in the chart) when price crossed over the upper boundary of the WW. As price rushed into the blue yonder, it coursed its way all the way up to its 1-4 Line, which is customarily known as its Profit Line.
Note how the current Bearish WW is setting up.
A quick note on the contents of the chart: You will notice that the words "tunneling" and a long rectangular feature within each of the patterns. In prior lessons on the WW, I would ask traders new to the pattern to add a measure of assurance that the pattern they are looking at is indeed a WW. And this is simply done by looking for a pathway which appears in most WW patterns, as if price had moved out of the way to allow for the safe passage of the 1-4 Line. This feature, although not mentioned by the author of the WW (Bill Wolfe), is a signature trademark that I would be looking for to ensure that I am seeing what I need to see, sort of an obligatory deja-vu ... Again.
Feel free to visit the "Predictive Analysis & Forecasting" Room where many occult geometries are discussed, along with trading pearls and other less-public sanities - Here is a link: www.tradingview.com .
Cheers,
David Alcindor
Predictive Analysis & Forecasting
Denver, Colorado - USA
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Twitter: @4xForecaster
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Wolfe Waves Pattern: Aftermath ... Lesson | $AUD $NZD #RBA #RBNZWolfe Waves Pattern: Aftermath ... Lesson | $AUD $NZD #RBA #RBNZ #forex
Friends,
Last March 06th, I presented a potential short signal based on an advanced geometric pattern called the Wolfes Waves pattern. Now that its 1-4 Line was hit and price nearly hit our defined TG-1 = 1.05260 (missed by a mere 4.3 pips, unless you generously front your take-profit orders), we are contemplating a potential reversal to the upside. At least, this is what my predictive analysis and forecasting system indicates at this point.
Before formulating a new bullish directional opinion - that will come on a separate chart - I would like to quickly review the features that a trader, unfamiliar with this Wolfes Waves Pattern (or "WW" for short) should consider before taking a position.
WOLFE WAVES FEATURES:
1 - 5-POINT REQUIREMENT:
The primary features of a WW are its 5-point definition, simply numbered points 1, 2, 3, 4 and 5. Typically, points 1, 3 and 5 fall in line and remain opposite to points 2 and 4.
2 - 2-LINE REQUIREMENTS:
As points 1, 3 and 5 fall into a line, a 1-3-5 Line comes into shape, opposite and convergent relative to the 2-4 Line passing through its defining points 2 and 4.
3 - CONVERGENT LINES:
Lines 1-3-5 and 2-4 should converge and form a wedge. While it is best that the convergence occurs while both lines are pointing in the same direction (i.e.: both lines point up with the bottom 1-4 Line being pointing up steeper than 1-3-5 Line to maintain their convergence, and vice-versa: both pointing down with the top 1-3-5 Line being down steeper than the 2-4 Line to maintain their convergence). This total up or down direction is paramount to define the resulting direction in price.
4 - WEDGE DIRECTION DEFINES PRICE ACTION:
Now, we have 5 points, articulated into convergent lines that form a wedge. We also agreed that the overall direction of the two convergent lines will define either an up-slanting convergence (a rising wedge), or define a down-slanting convergence (declining wedge). What follows are rather simple rules:
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(lesson continues in the comment section)