The search for High Winning Probaility Trade continues

[Ares]

5 point Bullish Wolfe Wave

MACD Divergence

Oversold Conditions

3 Magic Lines

[Ares]

My most recent interest is in the 5 point Bullish Wolfe Wave.

I first saw this here at 3 Stocks on Fire started by Calven but didn't get a chance to look at it in detail right away.

Lately, I've been visiting different internet sites and joined a few forums to clearly understand this strategy.

http://www.wolfewave.com/index.htm
http://www.chart.nu/wolfewave.htm
http://www.wolfcharts.com/default.asp
http://www.elitetrader.com/
http://www.goforex.net/forum/search.php?searchid=9519
http://www.forex-tsd.com/search.php?searchid=631819

To what I've gathered, there seems to be different interpretations of the wolfe wave.

I guess the one that makes the most sense and is followed by the majority of traders (the market) will win.

[Ares]

I would like to follow IVAN for my study and may trade with real money.
Please do your own Due Diligence.

I was going through the symbols that were at the 3SOF stock picking forum and entered them at wolfcharts.com

Wolfcharts.com gave an analysis of a 5 point Bullish Wolfe Wave Pattern.
http://www.3stocksonfire.org/trading/index.php?topic=745.msg99122#msg99122

I decided to draw some lines on stock charts and I came with this interpretation of IVAN.
It looks like IVAN completed a 5 point Bearish Wolfe Wave and Bounced off the target (Wave#6).

Scenario:

Asumming consensus support is 1.73, consensus resistance is 1.97 and the stop is just below the swing low of 1.65.
That would be close to the 10 cent:25 cent reward ratio.

If the 1.65 stop is triggered, where would be the next buy target?

I would probably be looking at around 1.25 (1.27 Fibonacci extention) which is at least 25 cents below the 1.65 swing low to give me a potential risk/reward of 10 cent risk and a reward of at least 25 cents.


Looking forward to how other traders draw their version of the wolfe wave.

[Ares]

What concerns me with IVAN is the big volume that accompanied the top (2.70 high) - A bullish volume capitulation?

If the rallies are accompanied by low volume and:

1) If price doesn't break the 1.98 or the 2.30 swing highs that would create a head and shoulders pattern.

2) If it doesn't break 2.70 that would be a double top

What I've also read from other resources was Bearish Wolfwave target #6 is for shorts to cover and not the ideal entry to go long.

Does that mean we have to look for a new 5 point bullish Wolfe Wave to form first?

It may be better to see the MACD create a higher high cross first.

[Ares]

Another point of view :

The weekly chart looks like it has a cup and handle pattern (not too familiar with this - correct me if I'm wrong).

The daily chart looks like it had fuel (volume) to push through those 3 magic lines and recently bounced off the 200 simple moving average at 1.65.

[Ares]

Scenario: If I were the AX

I would probably trigger the stop at 1.65 and catch them by refreshing my bid of 100 shares using an ECN.

As it rallies back bewtween 1.65 and 1.97, I will show strength by showing size.

Shake out the weak hands past the lower trendline to create the 5 point bullish wolfe wave entry.

Oh if only this was possible...

For now, I guess I'll just have to gather as much info and try to make some money.

[Doris123]

Fantastic!