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$GBPUSD - Lesson: Adv. Market Geo | $USD $GBP #BOE #forex

FX:GBPUSD   British Pound/U.S. Dollar
Following 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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13 MAY 2015 - Re-Visiting The Geo From A Top-Down Approach:

As I was explaining earlier, I thought it worth reconsidering the entire geometry, especially whenever price action far exceeds the scale or range of moves originally considered in the analysis. In other words, if price far exceeds the range considered, then a much larger agent is at work at a larger scale.

First, let's look at the recent bearish impulse, using the Elliott Wave principle. What we are seeing is an internal 5-wave down-swing, with the 5th wave terminating at a standard 1.618-Fibonacci extension, as follows:


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As was established before, the Elliott Wave consideration if paramount, since our hunt for the Geo occurs at consolidation levels, and we have established a "Spine Rule', which simply makes use of the often straight nature of the 3rd wave impulse as it originates from the termination level of Elliott Wave's 2nd wave. In the chart, there are two such "Spine", drawn as dark purple dash lines.


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You will notice that in most cases, the "Spine" that is most adherent to EW's 3rd wave will help herald the emergence of EW's 4th wave. HOWEVER, in the rule we have established, whereby we seek the highest probability of a Geo development, we are best off letting most of, or the entire, Elliott Wave impulse ("IMP") unfold, since it is at the conclusion of such impulse that consolidation will occur, and a consolidation is the primordial environment in which the Geo will emerge. These consolidation areas are referred to corrections in Elliott Wave parlance ("COR"), and such geometries can also be found in the "COR" segments of EW ... In other words, there are other places to wind Geos, and the "COR" environment do not only occur at the termination of IMPs ... There are other places where they would occur, but it would take too long to explain. Simpy refer to http://www.ElliottWave.com for the only true and most respected authoritative site, where Mr. Robert Prechter and other associates offer free course on the basic development of EWs.


Now, let's return to the Geo ... As indicated above, the Geo will develop in the conclusion of the IMP, and in this case, we can look at a probable candidates among many others, as follows:


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snapshot



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As we are facing the choice of three good contenders, I will take this time to reinterate a rule that I shared on another chart this week, which simply refers to the construction of the internal legs, and how they compare. In essence:

1 - The 1-2 Leg will most often be constructed by a SIMPLE symmetrical ab = cd geometry, or a simple "zig-zag" ("ZZ") in EW terms;

2 - The 2-3 Leg will most often be constructed by a COMPLEX ZZ, such as a Double-ZZ or a Triple-ZZ, or a W-X-Y-XX-Z construction - This is the Leg that will also support the "Geo Anchor Rule" and give shape to the "Tunneling" concept.

3 - The 3-4 Leg will most often negate a prior, false or pseudo-Point-4. You will see that in many nascent Geos, in which a Point-4 appears to be confirmed, but a 3-4 Leg will offer a larger, but Simple ZZ, or a simple, symmetrical ab = cd pattern in which point-c of that pattern will define the true Point-4;

4 - The 4-5, the 3-4 or the 1-2 Legs should be used for Fibonacci extension points, from which a Point-5 might occur at the 1.272, 1.414 or 1.618 extensions


Now, looking at the first rule above, here is why I would chose the following 1-2 Leg:


First, I am considering the highlighted area, as shown:

snapshot


Admittedly, this area consists of a wave-4 to wave-5, so it is looking at the near-completion of the EW, when we just mentioned that it is best to look at opportunities following the completion of the 5th wave. However, comes to compete against this concept is the fact that the "Spine" has transected that area twice, suggesting that this area might be optimal for a nascent Geo.

Next, I will look for the simple symmetrical ab = cd, which is the feature of the fist construction rule, as follows:


In this first step, I know that the ab =cd will terminate at the nadir of the entire EW IMP, so I can "reverse-engineer" by drawing its cd leg, as follows:


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Next, i simply cut/past and see where the top-end of that duplicated segment points to, as follows:

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At this point, I have a perfect ab = cd representing the 1-2 Leg, and by definition, Point-1 of the nascent Geo is given as follows:


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Worth looking for are discreet price action that gives credence to these 1-3 and 2-4 Lines, and te following arrows seem to confirm this, as follows:


Here, the 1-3 Line received a above/under validation:

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... while the 2-4 Line receives a double-support validation:

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OVERALL:

While all this comes as a sophisticated explication of the manner that I approach the process of screening through high-probability set-up, it should not be considered a more valid method than one in which you develop your own consistent method. All that I am showing and sharing here is as objective and attainable a means to look for a geometric approach to trading. Combined with our own indicator - if you have to have one - I hope it will greatly enhance the outcome of your trading performance.

I will continue to add comments to the development of this Geo. If it turns out to be consistent and adherent to the underlying geometric development, great. If not, we would move out.

Stay tuned,


David Alcindor
Predictive Analysis & Forecasting
Durango, Colorado - USA


-----
Twitter:
@4xForecaster

LinkedIn:
David Alcindor
-----


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+5 Reply
13 MAY 2015 - Addendum:

So, as of this writing, here is how the chart would appear, considering the potential nascence of this Geo:


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David Alcindor
+3 Reply
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13 MAY 2015 - Tech-Note:

Now how the "Tunneling" concept remains consistent, despite the transecting of the 2-3, 3-4 and 4-5 Legs, where the respective bars/candles are seeming leaping over a "pre-scient safe passage" of the 1-4 Line, way before the Geo would ever be deciphered:

snapshot



David Alcindor
+1 Reply
13 MAY 2015 - Update:

At this price level, it would not be unreasonable to consider that an ectopic Point-5 has been carved out, and that based on the "Off-Set Rule", a point of repose will likely be defined at the price level corresponding to Point-4, as shown in the following chart, where the second validation refers to the probably-true Point-4 (green asterix), compared to the red asterix - The "Tunneling" concept also offers a "best-fit" situation - This is not a solid method to assert the validation of Point-4, but one in which geometric correspondences among the various parts of the Geo and adherence to certain rules is worth considering :


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David Alcindor
Reply
are you saying that it will come back to touch 1-4 line as you always match?
+1 Reply
Hello @danndc - By invoking the "Off-Set Rule", I am saying that price is more likely to return to the price level corresponding to Point-4. In terms of probability, Point-4 level validation is much stronger a signal than the probability of price returning to a greater depth and attaining the 1-4 Line.

The "Off-Set Rule" simply makes a geometric compensation whenever Point-5 is exceeded by an adverse excursion in price reaching a point of reversal that is "outside" the location that is defining Point-5 along the 1-3 Line, once price crosses that line. This "outside" position is defined as an ectopic ("ex-" = out, away; "topia" = place or locus), thus defining a Point-5-prime (5') or a Point-5-second (5") based on the use of the 2-4 Line, originating off of Point-3 or Point-1, respectively.

The "Off-Set Rule" I establish, thus offers the Geo trader the following guideline:

1 - For every price reversing from Point-5, a target should be expected along the 1-4 Line

2 - For every price reversing from Point-5', a target should be expected at the price level of Point-4

and

3 - For every price reversing from Point-5'', a target should be expected at the price level of Point-3.

Is this making sense at all?


David Alcindor
+1 Reply
What is tunneling?
Reply
GU is still going up. every technical is showing a retracement tho.... im waiting
+1 Reply
Hello @AZ.R,

On a pure structural basis, you might have noticed that a prior support (GREEN arrow) ceded to bears, and that TWO prior attempts to transgress that prior support failed (RED arrows), hence the "Support-Turned-Resistence" element that is so consistent in Structural Analysis, as shown in chart:


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If that level is breached, then a significant event occurred that is contrary to the recent two rejections.


David Alcindor
+2 Reply