Wolfe Waves

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Wolfe Waves

beethovenwithsaint 27 Jul 2009 15:44

Friends,

Though I am a very new student of trading and newer still on Wolfe Waves, Saint has directed me to start this thread and try and introduce Wolfe Waves for the benefit of ambush traders. I may make mistakes and may be wrong sometimes in my interpretation but the effort is to learn together.

As Saint is my teacher and I have learned trading from him, similarly the credit for teaching me Wolfe Wave goes to a man by the name of Ajax in TJ. It is with a prayer of gratitude to him that I start this thread. I would request all those interested in learning about Wolfe Waves go to his thread in TJ for further learning.

I am listing some links below, which give the basics of Wolfe Waves in easy terms and the terminology i.e., points 1,2,3, 4, and 5 and symmetry. For the sake to uniformity, easy understanding and posting, we will stick to the numbering of points as given in these links – they are widely followed and universally understood.

I will not dwell on the introduction and basic terminology and will assume that at least these three links are read by you all thoroughly and I will concentrate on latest examples and explain the formation and trade entries and exits i.e., the applicability of this knowledge in our day to day trading.

http://www.voodootrader.com/wolfewave.htm

http://www.wolfewave.com/what_is_the_wolfewave.htm

http://www.investopedia.com/articles/trading/05/040405.asp

More in next posts.

Thanks

Bee

Re: Wolfe Waves

beethovenwithsaint 27 Jul 2009 16:40

Lets take today’s example of WW on BNF 5 min TF chart. The morning chart and lines were drawn in a hurry and are approximation – but reflect the time and work environment of a very busy ambush trader. To see the WW, go with the eye estimate about the symmetry. On smaller time frame, WW can take a lot of flexibility in the symmetry. You will find a few examples in the links I have quoted above.

Now this WW had pretty nice time interval symmetry between 1 and 3 & 3 and 5.

Here I would like to introduce target ray instead of target line. If the bar at 4 is a wide bar then a line from 1 to the top can be drawn and another from 1 to the mid point of the bar at 4 can be drawn. I have redrawn the lower line again with white and as can be seen the price touched this line and retraced. So this WW can be classified as successful one.

Please note WW are reversal patterns, so please see the pattern from this perspective and try to locate point 1 which has to be a PL (here we are talking about bullish WW only).

Now a word about entry and exits. We were short. We spotted this wolfe in the making. We draw the line 1-3 and extend. Point 5 still is not made yet. We go into alert mode the moment price goes below 1-3 line. Here the hammer (at point 5) was the trigger to exit. Exit over the hammer. Next bar is bullish and crossed back over the 1-3-5 line. Entry into long to play this WW and chase the target is above this line and above this bullish bar.

More in the next chart, which I promise, will be of a better presentable quality :-):-)

Bee

Last edited on 28 Jul 2009 02:47 by beethovenwithsaint Show more

Re: Wolfe Waves

beethovenwithsaint 27 Jul 2009 17:24

Re: Wolfe Waves

beethovenwithsaint 27 Jul 2009 17:41

Some Wolfe waves from my archives:

Re: Wolfe Waves

beethovenwithsaint 27 Jul 2009 18:12

Some points to hunt for the wolves.

For ambush traders who are essentially playing 5 min charts, it is advisable to shift to 1 min chart periodically to check on formation of WW. The above examples are live wolves caught on 1 min chart. As the trade is fast paced, go with the eye estimate and do not be obsessed about the symmetry. WW on smaller time frame work even with 60:40 ratio of bars (either way) between 1-3 and 3-5.

As with any pattern, WW fail occasionally but very rarely. On smaller TF, I have observed failure occurring on very sharp trending days when prices just blast thru everything, WW included.

Symmetry and ratios have to be checked carefully when studying WW on larger TF like the hourly or the daily chart. There we have time to analyse in detail the formation of WW as per textbook rules. But that is something which I leave for the individuals to study and pursue themselves - here we will only concentrate on smaller TF WW.

Please note — for day traders —- on 5 min charts - keep 5-day chart always open. Sometimes WW form on higher TF like 10, 15, 30 and 60 min TF. Generally due to the nature of WW, such WW will span over more than a day. So it is advisable to check on the formation of WW on higher TFs at EOD also. Such example is also given above of 20 and 21 June.

With this post, bulk of my material on WW is over.

Personally due to many reasons I have stopped trading 5 min charts and hence catching live WW on smaller TF will be a matter of chance only barring two scripts - NF and BNF which I follow very closely. If I chance on any WW on these on 1 to 5 TF, I will post live or will alert the members with a post giving bar time of point 1 and indicating whether it is a bullish or a bearish WW.

Rest I will ask my young friends who are superb traders on ambush and track many scripts to ask me about specific formations which if I am in a position to check and reply, will definitely do so.

Thanks for going thru these posts and please do get back if any queries are there.

Happy wolfe hunting

Bee

Re: Wolfe Waves

charan kpm 27 Jul 2009 18:32

Bee sorry for the irrelevant query for this thread pl tell me how to save the data and view after trading hour in trade tiger

Re: Wolfe Waves

beethovenwithsaint 27 Jul 2009 18:36

In Trade tiger, you can log in 24 hours and open charts. Upto 5 day intra — all bars can be seen. Also you can down load tick data which will be a csv file and convert the same into meta or ami or any charting software you have to analyse at a later date.
Bee

Re: Wolfe Waves

beethovenwithsaint 27 Jul 2009 18:39

I know MJ and ST are well versed in WW. I think some of the seniors also have studied WW in last 2/3 months. I would request them to also pool their knowledge here.
Many thanks:-)
Bee

Re: Wolfe Waves

Saint001 28 Jul 2009 03:40

These patterns happen very regularly and to spot them is a great add to one's arsenal as we attack the markets………..Thanx Bee for this great thread.

Saint

Re: Wolfe Waves

kapil123 28 Jul 2009 04:11

Great stuff Bee, thanks for the thread.

Kapil

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