The Wolfwave Pattern / Why walk with bulls - run with the wolves!

[calven]

Hi All,

First off, I would like to thank Calvin for this great tutorial on Wolf Wave.  I notice that some of you are using MetaStock software.

Calvin, I know that you are a pro trader.  I was wondering if you (or anyone else) have ever tried the Wolf Wave pattern recognition within MetaStock.  Is it accurate?  What is your input on this?

http://www.guppytraders.com/Metastock%20Formulas/metastock%20formula%2022.htm

Thanks in advance,

Wayne

I have never attempted to use pattern recognition software for WW's. I have used it for the "ascending triangle" pattern which is also a powerful bull pattern. Would be interested in using it for WW's  if it worked. I have never used metastock, only tradecision. If anyone else can comment on the validity of pattern matching for WW's on metastock I would also be interested.

Thanks,
Cal 

[calven]

Hello All - I'm a first time poster. Thank you Calven. I find this topic very compelling. I'm anxious for feedback about a Wolfwave pattern that may have formed with FORD. Unfortunately, I don't know how to get a chart of my work included here. Anyway, for those inclined to draw the chart for me/us, I would appreciated it.

From the $22.35 low on August 25, to the $29.85 high on September 13. This is point 1 to point 2.

From point 2 to the low of $16.75 on October 14. This is point 3.

From point 3 to the high of $26.40 on November 14. This is point 4.

From point 4 to the low of $13.91 on December 15. This IS point 5, or where point 5 was violated. In other words, I think we're at the buying point for the ride to point 6.

The line from point 1 to point 6 reveals a price target of $28. Not too shabby.

Thanks for your input.

Hey,

Thanks for joining our thread. I love having new posters here! Glad your here... Im hoping we can all master this pattern so we can use it to trade. By having more members contributing to this thread we can hopefully find more WW's!

As for FORD I don't think I see a valid WW pattern there. Where you said "The line from point 1 to point 6 reveals a price target of $28. Not too shabby." It would actually be connecting points 1 and 4 which would give the price target. Maybe the other guys could help me out if I missed it. Anyways here is the diagram below. DESC and QTWW are WW's. EQR is looking like one also.

cal 

[bid2ask4]

Calven, great to see you online. Yes, I meant to say the line from point 1 through 4 revealed point 6 to be at $28.

On the chart I drew of FORD, the line from point 2 to 4 was NOT parallel with the line from point 1 to 3. I see your bull and bear examples are parallel. However, line 1 to 2 and 3 to 4 are closely parallel, and line 2 to 3 and 3 to 5 are closely parallel.

If FORD is a mistake, maybe someone can draw it so we all see the mistake!

[kslifka]

Sorry bid2ask,  I think I charted this the way you stated.  I don't see point 5 hitting the trendline yet.   Also as you can see from Calven's sketchings, the trend should be in a downwave before it enters a possible Wolfwave.

[bid2ask4]

Thank you kslifka.

Yes, violation #1 was using the last runup to FORD's high of $29.85 - it's only been downhill after that, not before. We need something ALREADY in a downward trend.

Violation #2 was point 1 not connecting with point 3 so that it revealed point 5 accurately. And even for accuracy's sake, I don't want to see FORD go to $10 so that things do line up!

[rurouni]

I have never attempted to use pattern recognition software for WW's. I have used it for the "ascending triangle" pattern which is also a powerful bull pattern. Would be interested in using it for WW's  if it worked. I have never used metastock, only tradecision. If anyone else can comment on the validity of pattern matching for WW's on metastock I would also be interested.

Thanks,
Cal 

Thanks Cal,

I think we can use another Message Board under the Knowledge Center topic strictly for discussion on trading software/tools such as Metastock, OmniTrade, etc where we can discuss the use of such software more in depth for newbies and pros.  What do you guys think?

[kslifka]

As Calven indicated, DESC is in a Wolfwave.  Possibly headed for that descending line.

[Melf Elf]

Looks like SVA completed the bullish gartley and wolfwave pattern.  Was the 4th leg of the wolf leg too long, therefore destroying the pattern? 

Printed 4.30 today.

bjc,

If I'm understanding WWs correctly, the recent pattern in SVA can't be a WW because the lead-in was to the upside, but the pattern formed to the downside (see thai's chart near the bottom of page 2).  When thai and I were discussing the WW and Gartley possiblities, I forgot to look at the lead-in.

To qualify as a Wolfe Wave, the pattern must form in the same direction as the lead-in.  (calven, please correct me if that's wrong)

As you noted (applause), the Gartley completed yesterday at 4.34, a week late.  I think that it still qualifies as a completed Gartley, but if it had been last Monday, it would have been a near-perfect symmetry of price and time, and I was prepared to buy it there.

But, since it was late, and since I'm not real confident about playing these Gartleys, I didn't buy it yesterday. I would have been more willing to buy it if yesterday's candlestick was a Bullish Hammer, but it wasn't. 

One of the tricky things about Gartleys is that if it keeps going lower after it completes, you're buying a "falling knife."  There's no nearby support here, since key support at 4.82-4.85 support was broken, and since we also broke and closed below last week's low of 4.60.   

Wayne (rurouni),

Thanks for the Metastock WW formula.  Applause. 

I haven't had any success with figuring out how to work with formulas (my own stupidity), but I'll let you know if I figure out how to do it.





 

[Melf Elf]

The pattern since Friday's downside break is a compressed, or 'mini" Symmetrical Triangle, so to speak; a smaller version of the much larger Symmetrical Triangle.  When it finally failed this afternoon at the bottom of the broken larger Symmetrical Triangle pattern, the SPX tanked.

The pattern break in the 10-minute chart has us headed down to the bottom of the Wolfe Wave/Bear flag in the daily chart. 

A couple of things to note about this possible Wolfe Wave, so that we all have the same understanding about these patterns: (calven, please correct me if this is wrong):

1. The Wolfe Wave pattern is forming in the direction of the lead-in.  The lead-in was up.  The pattern formation is to the upside (also known as a bear flag).

2. Wave 5 didn't go above the pattern, but calven said that it doesn't necessarily have to do that.

"Notice that point 5 shown on the diagram above is a move slightly above or below the channel created by waves 1-2 & 3-4. This move is usually a false breakout or breakdown of the original channel and is the best place to enter a stock long or short. The false action at point 5 occurs most of the time in the pattern but isn't absolutely necessary."

[Melf Elf]

The QQQQ printed a new high today and still is chasing the trendline target at #6.

The QQQQ almost got to the Wolfe Wave target at #6 on November 23 (see green arrow). The trendline that day was at 42.12; the high in the QQQQ was 42.02.  Targets don't always get made exactly.  That was close enough, I guess, since yesterday we had a pattern break in the QQQQ to the downside.  40.30 is IN PLAY.

[Melf Elf]

Wayne (or anybody else),

I've been trying to work with the Wolfe Wave formula for Metastock.  For Column A, I started with...


Pa:=Trough(4,LOW,5);

...per the instructions below. 

When I got to the end of Column A, I got this prompt: "please array e.g HIGH, LOW, CLOSE, etc., or function expected."  I didn't know what to put, so I put HIGH at the end of Column A.  Anybody know if that was right? 

When I ran the Explorer program, I got the message "no securites to report."

I included QTWW, EQR, QQQQ, SPX, COMPX and a few others in the test, figuring that one of those would show up as a WW.  None did.

Here's the formula that I entered, according to the link that you gave us, Wayne:
   
Here's a simple Metastock exploration for locating Wolf Wave patterns. It doesn't hit all that often, but when it does, it's best to pay attention.

ColA: WW

Pa:=Trough(4,LOW,5);

Pb:=Peak(3,HIGH,5);

P1:=Trough(3,LOW,5);

P2:=Peak(2,HIGH,5);

P3:=Trough(2,LOW,5);

P4:=Peak(1,HIGH,5);

P5:=Trough(1,LOW,5);

tb:=TroughBars(1,LOW,5);

tb<=4 AND

p1 > pa AND

pb < p2 AND

p1 < p2 AND

p1 < p4 AND

p1 > p3 AND

p3 > p5 AND

p4 < p2 AND

Here's where I got the prompt to put HIGH, LOW, CLOSE or expected function.

ColB: Tangents

p1:=Trough(3,LOW,5);

p3:=Trough(2,LOW,5);

p5:=Trough(1,LOW,5);

o1:=p1-p3;

o2:=p1-p5;

a1:=TroughBars(3,LOW,5)-TroughBars(2,LOW,5);

a2:=TroughBars(3,LOW,5)-TroughBars(1,LOW,5);

tan1:=o1/a1;

tan2:=o2/a2;

Abs(tan1-tan2)

Filter:

colA AND colB <= .2

   

[domination]

hey, great thread going here.

[rurouni]

Wayne (or anybody else),

I've been trying to work with the Wolfe Wave formula for Metastock.  For Column A, I started with...


Pa:=Trough(4,LOW,5);

...per the instructions below. 

When I got to the end of Column A, I got this prompt: "please array e.g HIGH, LOW, CLOSE, etc., or function expected."  I didn't know what to put, so I put HIGH at the end of Column A.  Anybody know if that was right? 

When I ran the Explorer program, I got the message "no securites to report."

I included QTWW, EQR, QQQQ, SPX, COMPX and a few others in the test, figuring that one of those would show up as a WW.  None did.

Here's the formula that I entered, according to the link that you gave us, Wayne:

Hi Melf, I am still in the process of trying to get familiar with Metastock so I am new at it.  I cam across that site while looking for plugins.  I will let you know if I can get that formula running.

[Tirebldr]

Melf Elf when I used tradestation for awhile they had staff members who would help their customers build a search. I'm assuming MStock does likewise.
   Good Luck. You are on a good quest there.

[Tirebldr]

STEM on a 2 year weekly. Am I seeing a WW forming a final leg up Calven?
Fantastic tutorials on the wolfwave Calven

applaude