Following is a step-by-step demonstration of my own approach to Wolfe Waves detection, analysis and trading application. This does not constitute or represent Mr. Bill Wolfe's lesson on his namesake pattern, the Wolfe Wave (WolfeWave.com).
Instead, it represents my own interpretation based on a preceding interest in occult market geometries. What I have discovered may or may not represent the lesson content of Mr. Bill Wolfe, since I have never had the chance to receive his lesson, but the concepts are just as valid, per my own successful trading of this particular geometry - All of this is for educational use only, and does not constitute a trading recommendation. So, do your own due diligence, as always.
Lesson follows ... Hope you enjoy.
Stay tuned,
David Alcindor Predictive Analysis & Forecasting Denver, Colorado - USA
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TradingView is not yet optimally configured for linearly-delivered lessons, but I believe that they are working on improving this aspect of the site, as many other things they have done so far by working around the clock and constantly making this site the best there is in trading education and exchange of actionable, profitable trading ideas - This only occurs thanks to your constant feedback and support. For any technical request or demand for improvement, contact @admin (Stan Bokov)by email at: founders@TradingView.com, or simply following this link: getsatisfaction.com/tradingview for more general request.
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Please, you are very welcome to post charts that suggests new findings in the geometry, or inquires about general aspect of the geometry. HOWEVER, I will occasionally remove message where the content is found irrelevant, self-promoting, or inappropriate. This is not an attempt to police anyone, but simply a desire to keep this and other similar thread as beneficial and educational as possible to he greatest number of individuals in this increadibly diverse TradingView.com community - I will tend to not answer private request, suggestions or comments, as there is simply too many places to be at the same time, and that would simply be too unfair to miss an incredible suggestion and smart comment, if shared in separate format.
This is for you, the budding trader, the Geo-Buff, the up and coming beast of the trading world ... In the mean time, don't let me take your money by making stupid trading mistake. The money you lose is the money I got. So, thank you in advance, but no-thank ... Improve, shape up and treat this as your own little corner business.
Last thought: This is all free. There is no leading up to some gloated commercial end. It also represents years (at least since 1997) of geometric market research and trading experience ... I am not talking about the Wolfe Wave, whose discovery belongs to Mr. Bill Wolfe (WolfeWave.com - I have no financial interest in this, but I do like to keep the authorship credit where it belongs). I am taking about all of the little finds and discoveries of my own I have accumulated over the years which have contributed largely to the dissection of this and other patterns. I am the author and owner of other proprietary strategies, patterns and market ge0metry concepts, some of which can be gleaned across this TradingView.com site, or also looking me up on the 4xQuad page on Facebook (facebook.com/4xquad - Don't go to 4xQuad.com, as I let that URL go, and it is now an escort service, ... yeah, well, not as sexy as market geometry, so I apologize for being more interesting than that site, right?).
Let's turn to a smaller time frame regarding the EURGBP. As you may recall, there are currently TWO charts I have kept tab on regarding this EURGBP pair, one DAILY and one WEEKLY chart, as follows as of Saturday, 11 APR 2015:
The first step for this chart is simply to define a few of the features from the geometry that I would be needing as reference as the pattern develops - As you now realize, we are looking for geometric features that set up a LONG departure to the UP-side. So, as a reminder, the basic rules of construction for a RISING geoemtry are:
1 - 1-3 Line has to reside BELOW the 2-4 Line
2 - Both the 1-3 Line and the 1-4 Line have to point towards the same direction: Both UP or both DOWN. In the case of a rising geometry, we want both to point DOWN, since the reaction sought is an upward thurst
3 - Both 1-3 Line and 2-4 Line have to converge
In addition to these basic construction, we are also interested in looking for the "Tunneling" features. Here, the geometric rules are also pretty simple:
4 - Price will evolve in such as way that it will create a VISUAL path of least resistance, through which a line can easily be imagined running
5 - A geometric anchor point will exist between Point 2 and Poin-3, typically at a mid-way level, offering the reference point for that 'Tunneling" concept, resulting in a 1-4 Line, acting as the Take-Profit target.
6 - The slope of the resulting 1-4 Line is created by a line that will:
-- a- Either run from Point-1 to Point-4
OR
-- b - Run from Point-1 to the "Geo Anchor" reference.
7 - The choice between the two points above will be made by the 1-4 Line that results to a slope leaning CLOSEST relative to Point-5, so that the 1-4 Line is biased towards the reversing price that runs towards it, and increases the chance of getting hit.
Rule #4 above exists simply because in fast, volatile markets, I have seen the 1-4 Line being missed, and further analysis of the geometry would reveal that this "Anchor Geo" adjustment would have resolved this issue in such a volatile environment. This is DIFFERENT from the "Off-Set Rule", which is defined as:
8 - The presence of an ectopic Point-5, which typically resides above its expected position along the 1-3 Line as Point-5, will be defined as 5-prime, or 5'
9 - 5-prime resides along the projection of a paralleled 1-4 Line (dashed) originating from Point-3; a similar 5-secong (5'') would exist originating from Point-1
10 - The target sought from either a price reversal off of either 5' or 5'' shuld be determined as the "Off-Set Rule", as follows:
-- a - From the 5' position, a reversal in price will seek target at a price corresponding to the level of Point-4 of the geometry
-- b - From the 5'' position, a reversal in price will seek target at a price corresponding to the level of Point-3 of the geometry
All TEN RULES above represent the most important information I was able to glean off of the Wolfe Wave. Mr. Bill Wolfe is the author of the pattern, and his course can be accessed on his site at WolfeWave.com. I have not taken any of his course, but I had the chance to dissect his pattern over the years, and above rules have constituted elements of a best and safest practice in guiding in the construction of the pattern.
Following, I will use the development of the EURGBP as a live, on-going way to demonstrate features of the geometric rules, most of which should come to be applied in this demonstration.
Here, we are starting with a bare chart. Following are the features of the pattern I will applied to a potentially developing geometry. As we go along, I will do my best to keep referring to the TEN RULES above, as well as providing a few trading and charting pearls.
For instance, the first pearl here is to let the development of an Elliott Wave complete from its impulsive 3rd wave to its conclusive 5th wave. This is such because the geometries of interest (Wolfe Wave, wedges, triangles, ... etc) occur as consolidation patterns. Therefore, it is to our best interest to remain patient and wait until such a pattern is taking place.
Another instance is that, it is best to NOT use the early development of the consolidation as Point-1 of the geometry. Although this might not be always true, I have found that letting the pattern develop will often lead to the TRUER geometry. You will see this in Points 1 and 1', where 1' might represent a better point of origin for the pattern, as follows:
In the points above, you can appreciate that the future development of the 1-3 Line is attempted by simply revealing that the potential development of the geometry occurs with a DECLINING base, which the 1-3 Line represents - This is based on one of the rule above:
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1 - 1-3 Line has to reside BELOW the 2-4 Line
2 - Both the 1-3 Line and the 1-4 Line have to point towards the same direction: Both UP or both DOWN. In the case of a rising geometry, we want both to point DOWN, since the reaction sought is an upward thurst
3 - Both 1-3 Line and 2-4 Line have to converge
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HOWEVER, as indicated, one could easily be fooled by the correct placement of Point-1, In my experience, it is best to keep one's mind open to the possibility of a later development of the geometry, relative to the recent completion and conversion of a price moving from an Elliott Wave impulse to an Elliott Wave correction ... Remember: ALL of these geometries are sought at times of a correction, when price consolidates into internal up and down swings.
NEXT, we are looking for additional features of the developing pattern. Here, I am referring to the "Tunneling" rule:
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4 - Price will evolve in such as way that it will create a VISUAL path of least resistance, through which a line can easily be imagined running
5 - A geometric anchor point will exist between Point 2 and Poin-3, typically at a mid-way level, offering the reference point for that 'Tunneling" concept, resulting in a 1-4 Line, acting as the Take-Profit target.
6 - The slope of the resulting 1-4 Line is created by a line that will:
-- a- Either run from Point-1 to Point-4
OR
-- b - Run from Point-1 to the "Geo Anchor" reference.
7 - The choice between the two points above will be made by the 1-4 Line that results to a slope leaning CLOSEST relative to Point-5, so that the 1-4 Line is biased towards the reversing price that runs towards it, and increases the chance of getting hit.
Rule #4 above exists simply because in fast, volatile markets, I have seen the 1-4 Line being missed, and further analysis of the geometry would reveal that this "Anchor Geo" adjustment would have resolved this issue in such a volatile environment. This is DIFFERENT from the "Off-Set Rule", which is defined as:
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So, this leads to the following potential lines (dotted):
Now, remember that the Geo Anchor concept has to be kept in mind at all times, even this early in the development of the geometry. Here, I am referring to the choice of lines that would represent the 1-4 Line, or the Take-Profit, once price reverses from Point-5.
Point-5 will be naturally defined along the 1-3 Line, and the anchor choices are as follows ... relative to Point-1, where the RED asterix points to a attractive but not correct Geo Anchor, while the GREEN on points to the better one:
Thus, we get the following result:
Applying the same exercise relative to Point-1', we get:
Remember that the Geo Anchor concept has to do with define that point in time that is BEST suited to define a Take Profit.
OVERALL:
Well, this is it for now. I hope you have enjoyed this early, LIVE development of a market geometry, I will continue to post about this particular chart as time and actual geometry development permit. As I post this on this rather crowded thread, I wil also cut and paste this content and make it a new thread, dedicated specifically to this #EURGBP pair. Here too, as time permit, I will do the same with other Forex, index or any price moving, tradable species.
Thank you for reading thus far. If you enjoy these instructions, please let it be known by a mere thumbs up, as this will allow me to better gauge which topic is most interesting to this community.
Stay tuned,
David Alcindor
Predicitive Analysis & Forecasting
Denver, Colorado - USA
For those who know the various symbols I have used in my predictive analyses and forecasting, the dashed arrow ALWAYS represents the least probable outcome, whereas the SOLID arrow will represent the most probable outcome.
In both the chart, where Point-1 and Point-1' are tentatively defined, the SOLID arrow is defined as if simply because it represents the MOST PROXIMAL tentative definition of the 1-4 Line using the "Geo Anchor" rule as the "Tunneling" concept defined above, which again is:
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4 - Price will evolve in such as way that it will create a VISUAL path of least resistance, through which a line can easily be imagined running
5 - A geometric anchor point will exist between Point 2 and Poin-3, typically at a mid-way level, offering the reference point for that 'Tunneling" concept, resulting in a 1-4 Line, acting as the Take-Profit target.
6 - The slope of the resulting 1-4 Line is created by a line that will:
-- a- Either run from Point-1 to Point-4
OR
-- b - Run from Point-1 to the "Geo Anchor" reference.
7 - The choice between the two points above will be made by the 1-4 Line that results to a slope leaning CLOSEST relative to Point-5, so that the 1-4 Line is biased towards the reversing price that runs towards it, and increases the chance of getting hit.
Rule #4 above exists simply because in fast, volatile markets, I have seen the 1-4 Line being missed, and further analysis of the geometry would reveal that this "Anchor Geo" adjustment would have resolved this issue in such a volatile environment. This is DIFFERENT from the "Off-Set Rule", which is defined as:
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Hence, the two resulting potential charts:
OR
David Alcindor
takefal
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Analysis David is amazing mature and mellow, great job and a big bravo !!
One question David, how do we know from the beginning of the chart that the price will follow an upward trend or downward trend? This will be crucial for the definition of point 1.We could start point 1 from the highest point on the chart above (0.73800-0.73900 price level)?
4xForecaster
⋅
01 MAY 2015 - Update:
From Twitter/LinkedIn:
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EURGBP made significant incursions today as it broke above the recent structure high; Bullish outlook:
At the request of several traders, you may have noted that as of today (21 APR 2015), I have started to assign a thread for each Forex pair, so that it facilitates following the analyses. Therefore, from here on, I will make sure to develop a chart for each of the Forex pair, although I will also start posting individual index, stock, and commodities.
If there is a particular chart you'd like to share, please, do not just post the link. Simply use the icon in the right upper corner of the writing window, and cut/paste its URL. If there is a chart you'd like to bring up from another thread, simply right click on it, chose "Copy Link Location", then within that icon in the writing window, paste it, then click "Insert" ... It will show up as the URL address (i.e.: tradingview.com/xyz123 ... ) framed by https://URL within your text, but it'll show up as an image once "Post Comment" is clicked. If only the URL is posted without a visible chart, I am not likely to open it, nor would others, since we all go through so many of these charts in any given day. Make it easy for the sake of those who would enjoy your posting, comments and astute charting.
One last thing: If at all possible, try to make your chart as simply looking as possible. There is no need to mention your directional opinion, your feelings about a direction, or what you believe price should do, especially when supported by a myriads of complex and colorful indicators. Charting should never have to reveal the tools you used to arrive at an analysis. It should simply point to the bare essentials, stating a cause/effect, a before/after, or a single, simple point of discussion. I strive to deliver my charts to you in as simple a presentation as possible. The complexity of the predictive model, the technical tools, and other abstract elements are usually removed out of sight, not so much to keep it clean, but to have less "stuff" between you and me, so as to appear that I am here with you, and intentionally sharing something in the clearest and closest fashion as can be delivered.
My goal is nothing short than to introduce you to a different approach, look and activity surrounding charting, technical analysis and predictive analysis. But I want it to be of benefits to the largest number of other readers, students of the market as we all are, daily and incessantly.
I very much appreciate your following thus far, and look forward to more challenging queries.
Was hoping you could look at this WW and share your thoughts on a possible rally from here or is there higher probability of one of your Geo developments forming with a decline in price to a Point 5'?
Kind regards
iefan
4xForecaster
⋅
20 JUL 2015
@iefan, this past February, I posted the following chart:
Since then, I decided to wait for a BACA > 1-3 Line. Anything of a smaller scale is worth considering, keeping in mind that the rallying remains of a relatively high probability at this weekly level.
David
IvanLabrie
⋅
David I think it's possible that this rally has started. Got an updated view?
------------------------
TradingView is not yet optimally configured for linearly-delivered lessons, but I believe that they are working on improving this aspect of the site, as many other things they have done so far by working around the clock and constantly making this site the best there is in trading education and exchange of actionable, profitable trading ideas - This only occurs thanks to your constant feedback and support. For any technical request or demand for improvement, contact @admin (Stan Bokov)by email at: founders@TradingView.com, or simply following this link: getsatisfaction.com/tradingview for more general request.
------------------------
Please, you are very welcome to post charts that suggests new findings in the geometry, or inquires about general aspect of the geometry. HOWEVER, I will occasionally remove message where the content is found irrelevant, self-promoting, or inappropriate. This is not an attempt to police anyone, but simply a desire to keep this and other similar thread as beneficial and educational as possible to he greatest number of individuals in this increadibly diverse TradingView.com community - I will tend to not answer private request, suggestions or comments, as there is simply too many places to be at the same time, and that would simply be too unfair to miss an incredible suggestion and smart comment, if shared in separate format.
This is for you, the budding trader, the Geo-Buff, the up and coming beast of the trading world ... In the mean time, don't let me take your money by making stupid trading mistake. The money you lose is the money I got. So, thank you in advance, but no-thank ... Improve, shape up and treat this as your own little corner business.
Last thought: This is all free. There is no leading up to some gloated commercial end. It also represents years (at least since 1997) of geometric market research and trading experience ... I am not talking about the Wolfe Wave, whose discovery belongs to Mr. Bill Wolfe (WolfeWave.com - I have no financial interest in this, but I do like to keep the authorship credit where it belongs). I am taking about all of the little finds and discoveries of my own I have accumulated over the years which have contributed largely to the dissection of this and other patterns. I am the author and owner of other proprietary strategies, patterns and market ge0metry concepts, some of which can be gleaned across this TradingView.com site, or also looking me up on the 4xQuad page on Facebook (facebook.com/4xquad - Don't go to 4xQuad.com, as I let that URL go, and it is now an escort service, ... yeah, well, not as sexy as market geometry, so I apologize for being more interesting than that site, right?).
Enjoy, jump in, get excited, and calm down.
Best,
David Alcindor
alias: 4xForecaster