Monday, January 18, 2010

WolfeWave Technique


As I promised you, I wanted to share with you guys another forex trading technique that has been used by some forex traders. It's really simple but yet profitable and actually I'm quite new to this technique and I haven't use this technique in my forex trading. What I want from you is discuss about the technique and what we should do to improve it together.

This technique is called "The Wolfe Wave Technique". The technique is actually being used in a stocks market but it can also be used in a forex market. You can click here to know more.

The Wolfe Wave Technique is being used to find a balance of the market trend before using any indicators as a filter to convince us right before we enter a forex market.

Wolfe Wave Rules

Bullish


IMPORTANT POINT: If you use Wolfe Wave technique, you cannot begin looking for the Wolfe Wave until points 1, 2, 3, and 4 have been formed. Keep in mind that point 3 must be lower than point 1 for a LONG/BUY setup. Please note the odd sequence in counting, as you will see, it is necessary for the inductive analysis. By starting with a top we are assured of beginning our count on a new wave. Also, on the best waves point 4 will be higher than point 1 for a LONG/BUY setup.
  • The 2 point is a top.
  • The 3 point is the bottom of the first decline.
  • The 1 point is the bottom prior to point 2 (top), that 3 has surpassed.
  • The 4 point is the top of the rally after point 3.
  • The 5 point is the bottom after point 4 and is likely to exceed the extended trend line of 1 to 3.This is the entry point for a ride to the EPA line (1 to 4).
  • Estimated Price at Arrival (EPA) is trend line of 1 to 4 at apex of extended trend line of 1 to 3 and extended trend line of 2 to 4. Estimated Time of Arrival (ETA) is apex of extended trend line of 1 to 3 and 2 to 4.
Bearish


IMPORTANT POINT: If you use WolfeWave indicator, you cannot begin looking for the Wolfe Wave until points 1, 2, 3, and 4 have been formed. Keep in mind that point 3 must be higher than point 1 for a SELL/SHORT setup. Please note the odd sequence in counting, as you will see, it is necessary for the inductive analysis. By starting with a bottom we are assured of beginning our count on a new wave. Also, on the best waves point 4 will be lower than point 1 for a SHORT/SELL setup.
  • The 2 point is a bottom.
  • The 3 point is the top of the first decline.
  • The 1 point is the top prior to point 2 (bottom), that 3 has surpassed.
  • The 4 point is the bottom of the rally after point 3.
  • The 5 point is the top after point 4 and is likely to exceed the extended trend line of 1 to 3. This is the entry point for a ride to the EPA line (1 to 4).
  • Estimated Price at Arrival (EPA) is trend line of 1 to 4 at apex of extended trend line of 1 to 3 and extended trend line of 2 to 4.
  • Estimated Time of Arrival (ETA) is apex of extended trend line of 1 to 3 and 2 to 4.
Bookmark and Share

1 comments:

fenshim on March 1, 2010 at 11:09 AM said...

Hi!

I just wanted to let you know that we have launched a new website: www.mistercurrency.com . We want to create an easier way for people to share and promote the great information that’s out there.

Your blog has been selected; we hope it will bring quality traffic to your interesting blog.

It would be great if you could link back to us as well to let people know about this new website :-)

Simple link:

URL: www.mistercurrency.com
Title: The Currency Guide

or if you prefer you’ll find a series of more colorful widgets - stickers on this page as well

www.mistercurrency.com/badges

We look forward to sharing more information with you.

Let me know if you need anything.

Kind regards,

Elyse Cameron
www.mistercurrency.com

Post a Comment

 

The Forex Indicators © 2008 Business Ads Ready is Designed by Ipiet Supported by Tadpole's Notez