More Wolfe Lessons; Potential Short Trade Analysis | $AUD $NZD
Friends,
Yesterday, we posted a preliminary bearish statement, calling the trader's attention to a possible downtrend. I made it clear that the bearish statement was lacking an early bearish market reversal, and to this day, that signal has not been emitted. Yet - Here is the prior analysis and the option for you to replay the price action:
ANALYSIS HOLDS AT RANGE:
In that analysis, we defined a few structural points, namely the 1.07488-1.07353 resistance range, as well as a cautiously early target as "TG-1 = 1.05260 - 06 MAR 14", drawn against the plotted points of a Bullish Bat. The "Bat vs. my predictive analysis" point here was to emphasize how price is not always the best indicator to define a trend, since the proprietary system applied herein is price-independent.
PREDICTIVE ANALYSIS CAN TRUMP PRICE:
In fact, we just proved yesterday and today a similar point, when our targets for the EURUSD were defined above the multi-year resistance trendline, and yet both target got hit consecutively, one candle at a time. See where the THIRD target rests here:
While we await an early bearish reversal signal followed by a bearish market reversal confirmation, I thought it might be worth a Friday's while to look at a next level of complexity regarding eh Wolfe Waves Patterns.
WOLFE WAVES PATTERN:
As you may recall from prior explanation, the Wolfe Waves pattern ("WW") represents a rather advanced, complex market geometry, in which trend, counter-trend and trendline all work together to exact an area of reversal and a target. Now, add to that mix "trendline transposition", and you'd become atuned to the next level of WW complexity.
Here, I am referring to the use of the 2-4 Line, which if cut and paste, and placed at the tip end of Point-3, projects parallel to its original 2-4 Line, but away from the 1-3-5 Line.
DEFINING 3-5' & 3-5'' LINES:
In fact, the transposed 2-4 Line now becomes the 3-5-prime (written as 3-5' Line), and "physically acts as a discreet but efficient overhead resistance IN CASE price was to BACA (i.e.: Break Above, Close Above") point-5.
The example in the chart is LIVE and supportive of this technical reality, as 5' has dutifully acted as the point of reversal, as it should - There is also a 5-second, or 5" point, which is none other than that same 1-4 Line transposed and originating not from Point-3, but from Point-1, effectively becoming the 1-5'' Line.
3-5' ADVANTAGES:
While it seems that these various lines allow the trader to chase after price, remember that these lines are very reliable as a FIRST advantage. In fact, I find 5' more reliable than Point-5, as price often tends t favor that loftier level of reversal.
As a SECOND advantage, Point-5, 5' and 5'' allow the trader to set stop-losses quite tightly, thus affording larger rewards to risk ratios.
OVERALL:
(additional text below chart)
-----------------------------------------------------
Disclaimer: Forecasts, analyses and directional opinions generated herein are for educational purposes only and are not trading recommendations. We trust that you will do your own due diligence first, then seek professional advice from a licensed professional, then enter the market at your own perils - David Alcindor - TradingView.com Alias: 4xForecaster
Yesterday, we posted a preliminary bearish statement, calling the trader's attention to a possible downtrend. I made it clear that the bearish statement was lacking an early bearish market reversal, and to this day, that signal has not been emitted. Yet - Here is the prior analysis and the option for you to replay the price action:
ANALYSIS HOLDS AT RANGE:
In that analysis, we defined a few structural points, namely the 1.07488-1.07353 resistance range, as well as a cautiously early target as "TG-1 = 1.05260 - 06 MAR 14", drawn against the plotted points of a Bullish Bat. The "Bat vs. my predictive analysis" point here was to emphasize how price is not always the best indicator to define a trend, since the proprietary system applied herein is price-independent.
PREDICTIVE ANALYSIS CAN TRUMP PRICE:
In fact, we just proved yesterday and today a similar point, when our targets for the EURUSD were defined above the multi-year resistance trendline, and yet both target got hit consecutively, one candle at a time. See where the THIRD target rests here:
While we await an early bearish reversal signal followed by a bearish market reversal confirmation, I thought it might be worth a Friday's while to look at a next level of complexity regarding eh Wolfe Waves Patterns.
WOLFE WAVES PATTERN:
As you may recall from prior explanation, the Wolfe Waves pattern ("WW") represents a rather advanced, complex market geometry, in which trend, counter-trend and trendline all work together to exact an area of reversal and a target. Now, add to that mix "trendline transposition", and you'd become atuned to the next level of WW complexity.
Here, I am referring to the use of the 2-4 Line, which if cut and paste, and placed at the tip end of Point-3, projects parallel to its original 2-4 Line, but away from the 1-3-5 Line.
DEFINING 3-5' & 3-5'' LINES:
In fact, the transposed 2-4 Line now becomes the 3-5-prime (written as 3-5' Line), and "physically acts as a discreet but efficient overhead resistance IN CASE price was to BACA (i.e.: Break Above, Close Above") point-5.
The example in the chart is LIVE and supportive of this technical reality, as 5' has dutifully acted as the point of reversal, as it should - There is also a 5-second, or 5" point, which is none other than that same 1-4 Line transposed and originating not from Point-3, but from Point-1, effectively becoming the 1-5'' Line.
3-5' ADVANTAGES:
While it seems that these various lines allow the trader to chase after price, remember that these lines are very reliable as a FIRST advantage. In fact, I find 5' more reliable than Point-5, as price often tends t favor that loftier level of reversal.
As a SECOND advantage, Point-5, 5' and 5'' allow the trader to set stop-losses quite tightly, thus affording larger rewards to risk ratios.
OVERALL:
(additional text below chart)
-----------------------------------------------------
Disclaimer: Forecasts, analyses and directional opinions generated herein are for educational purposes only and are not trading recommendations. We trust that you will do your own due diligence first, then seek professional advice from a licensed professional, then enter the market at your own perils - David Alcindor - TradingView.com Alias: 4xForecaster