Support, Resistance & Chart patterns

[Romsunz]

Unfortunately didnt - my pending sell order wasn't filled

Thank you once more for explanation.

[yamez]

Hi slipshod,

My broker offers AutoChartist for free. Would this at least be of use for finding potential setups? In the attached screenshot AutoChartist has drawn the blue and green lines of the wedge pattern, along with the grey box which is the TP zone.

Autochartist also have a web interface that allows multi time frame alerting to patterns of your choice, both emerging and complete.

Regards,

yamez.

[WideEyed]

Wolfe Waves are a bit like Elliot Waves, aren't they? I know someone who used to make a good living with just Elliot Wave analysis. Unfortunately, 9/11 and subsequently the financial crisis have caused a lot of models to stop working. And Elliot Waves were always subject to criticism in that they relied too much on interpretation and subjectivity and that they worked better in retrofitting than they did in real life.

So it was with some scepticism that I've been reading this thread. Slipshod's excellent narrative, clear explanations and numerous examples won me over and I decided a few days ago to spend some time investigating the methods discussed in this thread. There isn't much around on Wolfe Waves. The author's site gives a few examples which, like EW, look great in retrospect and could have been examples selected because they fitted the theory. To learn more he asks for $3000, not an amount I was willing to risk on something that's pretty much unlikely to work. However, I did find an ebook on WW and downloaded it. It consists mostly of examples where the method works. I studied it in great detail.

Selective back fitting is great, ain't it?

So I came back to this thread and read it again. Slipshod, I must say, you've done a fantastic job here. And I'm glad I came back. Because I then spent a couple of days analysing charts using just WW. Two whole days of just analysing charts of Forex pairs, commodities, indexes.

I'm a lot less sceptical now. In fact, I'm beginning to see the patterns and it's like a light bulb has come on. I tested my interpretations out on a few demo trades where by all other analysis the price shouldn't have done what it did. But every single trade closed at TP

Awesome!

Many thanks to slipshod. Here's one analysis for today - the 15M GBPJPY. What do you think? I went for a conservative TP as there are multiple points at "4" and the dotted line could just as easily been drawn through the last bar to hit the slope.

[[Edited to change EURJPY to GBPJPY]]

[WideEyed]

And a quick 50 pips banked

[slipshod]

Hi WideEyed, thanks for posting Are you sure that's EJ? My M15 chart looks quite different.

As you may have gathered from the charts I've posted, I'm very particular about the patterns I choose to trade, and that one would have given me pause. From what I can see on your pic, its a consolidation during an uptrend, which may give it bias towards an upwards breakout - and that's one thing in its favour.

There's two things against it being a reliable Wolfe Wave. Firstly, the point 1 isn't anchored on a low, but is suspended halfway up the preceding rise. I know Bill Wolfe sometimes drew them like that, but I've never found them to work very well. Secondly, I'd prefer to see the wedge form after more of a fall, seeing its a bullish wedge - were it to continue to drift down for another half dozen candles and create a tighter wedge then I'd definitely be interested.

I see by your second post though that the trade worked perfectly - congrats

Btw I don't care much for the Wolfe Wave's target line, even less for its predicted ETA. I've seen many WWs that fail to reach the line, some that hit it precisely then stop, some where the price busts through that line like its not there and runs much much further. Really you just have to take what the market gives you - there's many examples of this I could post if you were interested.

Its been a while since I've posted a chart of my own here, so this is what I see on my EJ M15 right now:-

[WideEyed]

There a nice setup brewing on the SUGARUSD daily if your broker offers it. It's a bit late to the party but there's still a fair way between current price and my anticipated .18750

[slipshod]

My borker doesn't offer that one, no. I agree though, does look promising. If that breaks to the upside it could be quite a powerful move. Could be equally powerful if there's no reversal and it breaks down instead.

[WideEyed]

I've revised my previous post from EUJPY to GBPJPY . Sorry for the confusion.

Yes, there are several instances where the price doesn't reach EPA or reaches it way before ETA. In most of those cases I've found the setup itself wasn't ideal. The volume and action at 5 seems to make a big difference.

I've modified the standard WW advice (slightly) and play it a bit conservative and it works out far more often than not. More about my theories and experiments on this in a few days/weeks.

There's two things against it being a reliable Wolfe Wave. Firstly, the point 1 isn't anchored on a low, but is suspended halfway up the preceding rise. I know Bill Wolfe sometimes drew them like that, but I've never found them to work very well. Secondly, I'd prefer to see the wedge form after more of a fall, seeing its a bullish wedge - were it to continue to drift down for another half dozen candles and create a tighter wedge then I'd definitely be interested.

I used to initially look for the 1,3 and 5 to form a line, but Bill's doc advises focusing on the 3 and 5 and drawing backwards to the 1 even if 1 falls in the middle of a rising bar! Ideally, of course, you want to focus on the most clear signals. But thanks for your analysis on the wedge fall. I learn a lot from your posts.

some that hit it precisely then stop

I found that too. As standard (for now) I set TP always a bit lower than WW predicts. I also take into account if there are any major S/R zones around the predicted price (old habits die hard . In time, maybe, a better way to capture the movements past my conservative TP would be to have an EA that raises or trails SL - I don't know yet.

Re your EURJPY wedge - I like to see the lines of the wedge converging a bit more rapidly than this.

[slipshod]

I'd love to learn from your observations, I've been trading these patterns on my own for many months now & hardly anyone I can talk to about them, and its always good to see someone else's thoughts independent of your own

You've got me started looking at charts now - past midnight here on a Friday too. I'll post a few shortly...

[slipshod]

Ok, here's a few charts ... I know I've posted on these same periods earlier in the thread, but its easier to revisit them here than try & look for old links They're a great illustration of taking what the market gives. Like you, I set a TP level for my trades, but these days I'm dividing my entry into three - one with a fixed TP level, one to trail any impulse move aggressively & then stop out, another to trail price slowly & leisurely. That way I'm hedging my bets as to how much profit a reversal might give me.

eu-ww-1.png

eu-rw-1.png

eu-ww-2.png

au-ww-3.png