Trading With The Flow!!!

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

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

Some Wolfe waves from my archives:

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

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

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

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

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

Great stuff Bee, thanks for the thread.

Kapil

Thankyou Saint Sir and Kapil,
Lets see how the hunt for the wolves go:-)
Reminds me of Jack London's "The Call of the Wild" and "White Fang" read a life time ago. Never thought the context would be so similar but in so starkly different locale. Guess no one reads such books now a days - at least not me anymore, hahaha.
Bee

Great stuff bee,
here is one recent example of bearsih ww in adlabs 5min

Bee plz look into following chart of SBI daily, is it bullish WW ?

nice thread bee…..hoping to spot sum of dem live….if u can help me spot it…..thnx :)

Thanks Prem & Neeraj,

Nice catch both Prem. Good going. In, daily, suggest reading various thread about WW and literature and check out the ratios carefully. You will have enough time to analyse WW on Daily chart - better the fit more are the chances of success.
Bee

Great one Bee…hoping to learn more from you.

Will eagerly await the live wolves that you show us…..

Puneet

Nice Thread BEE so many things to track now

Thankyou Puneet Sir - please do contribute here.

Thanks Satya - please track WW on 60 min bars and catch them while in the formation and put up those nice charts of yours.

Bee

Looks like WW in BNF 5min chart. just find it after completed. Damn it.. when i will able to detect it before the target is completed…. :)

Fantastic Prem!!! Do not worry - all in due time - as Saint says trade of a lifetime comes every so often!!!
Bee

one ww completed in bnf …. but another taking shape.. look in bnf 20min chart.. it also visible in 30min & 60min

Thanks Bee for this wonderful thing, i thought this thing i will never look into but now your thread. Please see currenlty a WW on Minifty now, already 5 formed and target is around 4575…i can say about the target because point joining 1 and 4 is a straight line.

target achieved :)

Thanks Tushar,
Nice effort. A small correction in bearish WW point 4 should be below point 1 significantly. Wave 3-4 has to travel well into 1-2 wave territory.
Read the small write ups in the link provided in my first post and commit them to memory. With a bit of practice you will get there.
Bee

Though had not gone thru the material postd by BEE but bit curious can any body explain the logic behind this pattern and why should it work and how can we view this pattern in term of supply and demand ??

Bee Sir…didnt get your Point 5 on the chart…

Puneet

Hi

WW in Mini

Puneet

Pt 5 is the topmost point in the chart. Seems outlandish making it lopsided but you will find a few examples of similar nature in first link

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

Bee

Bee,

Bearish wolf wave on 5 min NF…target 4550….just see whether it is right…..

ST

ST
Are you referring to chart by w2g? Very difficult to judge as point 4 drags along the 2-4 line. Many target lines can be drawn? I had also seen this while it was forming but did not post it due to lack of clarity.
Bee

NF-CUrrent month-5min Wolfe wave

Wolfe wave observed in Nifty futures 5 min chart in the afternoon session today….

Market could not get sufficient time to complete wave 5….it will complete it in the opening tomorrow morning.

Bee please check whether it looks like a valid WW

Smart_trade

Yes ST,
Lets how things turn out tom. Another view point in chart below:

Anyone tracking STs WW on 5 min TF NF??!!!
Bee

is this a wave on mini 5 min.?

Anyone tracking STs WW on 5 min TF NF??!!!

This is how it is prograssing till now…

Right Prem
Draw a few rays (target lines) to keep track of the progress. The entry could have been over 10:10 bar hi. Lets see how it goes:-)
Bee

Oops Sorry Tushar did not see your post. Yes it is, having internet problems plus a few positions to manage.
Bee

No probs Bee, I got my answer as Prem posted…thanx.

So ST's WW!!! Something to ponder. If we draw a ray from '4a' point (my interpretation of the WW above) the prices just touched the lower line of the ray and crashed. Chart at EOD.

Meanwhile enjoy shorting the market:-)

Bee

MiniNifty WW update Target achived

Nifty Fut WW in 15 min
Target line 1-4 may not achived as it pass sweet zone and reverse from parallel line of 2-4 from point 1
Pls see chart

Thanks
Harish

BankNifty Fut WW
Multiple Top as point 4 so expected target line 4(3)
Also watch 4Th wave is also bearish WW which give Target of 5Th , in such case higher probability that Target of current WW is achieved

Thanks
Harish

posting a 5 min chart of SAIL of 29/07/09…seniors comment appreciated for the pattern on wolf wave…does it qualify as a wolf wave….

Good going Harish. BNF WW - main one - I have reservations — as it is too lopsided —- symmetry is off by a big margin but the inner WW was a good catch. Way to go, cheers:-)

Raj - seems ok. Pl track this and put up the chart showing the outcome.

Great!!!!

Bee

Some crystal ball gazing. My area of interest WW and Fib. Any takers on bet that Price will hit 4457:-)
Careful — trade the chart not the prediction

Bee

Nifty fut WW

Thanks
Harish Chheda

Nifty Fut
Pls see chart

Thanks
Harish Chheda

Possible WW but at the time ofposting seem it will get negated :(

Point 4 moved 2 bars further to the right a little higher…

another ww at 1.30 point 1….target completion near…yo hooooo my first trade with WW :) Taken support at trendline, and half bar target met….so out by half….one lot for SL(the line joining 1-3-5 or full target…..

Thanks Bee for this thread, my first profits in ww. With SL so near, trading this was very easy…..Both targets met…out now

Great going Tushar, way to go!!! Thanks for your kind words.
Bee

Sterlite Ind Daily 30-07-09

Very new here, but 5th wave should ideally cross the 1-3 channel (false breakdown) which doesn't seem to be the case here. I am not too sure if this qualifies for WW.

A small WW formed in mini, didnt trade it coz profit point was very near…..also the timeinterval between 3 and 5 wasnt same.

A possible WW spotted in hourly in the minifty. And it is coupled with negative divergence with RSI. Please confirm whether it can be considered as valid one because then it has a target of over 200 points!!

Very new here, but 5th wave should ideally cross the 1-3 channel (false breakdown) which doesn't seem to be the case here. I am not too sure if this qualifies for WW. —Bonny

Yes, i too was not sure abt point 5, hence posted the chart for a feedback.

Sunsoft/Bonny,
I have seen such WW in literature and I call them lame wolfes:-) They work but are hard to identify and trade. So I tend to avoid them.
Bee

Tushar
Seems OK. Lets track this on Monday.
Bee

Nifty Fut WW

Thanks
Harish Chheda

Harish,

You have been trading WW for a number of years now. Please put up your ideas, interpretations and critique here.

Thanks

Bee

Friends,

We have had a few days now to get our eyes accustomed to WWs on various TFs and many friends have successfully attempted to find, track and trade these in real time. All going well till now.

Now we have to encapsulate the WWs in cast iron rules for higher TFs especially 15 min and above. These WWs will span more than a day of trade, so we will have enough time to really examine and fit in the ratios and satisfy ourselves in all aspects before selling our house and betting on a WW which is perfect.

The rules are as below. These will become more and more inflexible in nature on higher TF and especially if playing the daily then please follow these rules and check the ratios and no compromise on the same.

The rules are for a bullish WW and I am not drawing a diagram and hope by now all 5 points – 1,2,3,4 and 5 are in your mind and you can visualize the rules below. If not, then have a pencil and paper ready and draw the points and ratios as you read along:

· 2 should be the highest point in this WW
· 3 should be lower than 1 and it should be between 1.27 to 1.618 of 1-2
· 4 should be lower than 2 and it should be between 0.618 to 0.886 of 2-3
· 5 should be lower than 3 and it should be between 1.27 to 1.886 of 3-4
· Time gap between 1-3 and 3-5 should be equal or nearly equal
(the above figures are Fib ratios and in actual practice they can be rounded off to 0.6, 0.9,1.2, 1.65 and 1.9 – please note the rounding off has been done to accommodate wider range)

The above ratios and positions of the points have to be strictly followed for all TFs above 15 min.

For ambush players who are playing 5 min TF – checking WWs on 1, 2, 3, and 5 min TF is essential and here go with the eye estimate, as the trade is fast paced. WW can take lot of flexibility in these TFs upto 60:40 either way on time gaps. But position of points as explained above has to be adhered to. WWs can be used as profit taking and exit strategy at 1-3-5 line and also for taking new position to ride it to hit the target.

But on higher TFs it is advisable to adhere to the above ratios strictly.

The above ratios are basically Fibonacci ratios as all price movements (waves) occur at Fibonacci levels. WW are naturally occurring waves.

One way to track and focus WW is to monitor every 1.27 fibonacci level, most WW start with a 1.27 Fibonacci level. A wolf wave is supposed to be formed when point 4 stops before reaching point 2 and then reversing to make a new 1.27 Fibonacci level in the other direction, if you reach this point with all the right calculations then you have a wolf wave. All you have to do at that point is to draw a line from point 1 to point 4 to draw the target line. Also line 1-3 can be drawn and extended and wait for the potential point 5 to form. One of the ways to track WW.

With this the theoretical aspect is over.

Wish you happy trading with wolves.

Bee

Bee

Try to explain wolfe wave in words give me some time .

Thanks and Regards , Specially to Saint , all seniors and friends in TraderSaint family

Harish Chheda

Nifty Fut bullish WW against Bearish WW

Thanks
Harish Chheda

currently a bearish WW in progresss, coupled with -ve divergence in nifty 5 min chart. point one is 12.10 bar high…..currently 5th point in the making looks like it will crash from the top.

Nifty Fut Wolfe wave's of different size overlaping each other both bullish and bearish type

Thanks
Harish Chheda

Harish,

Pt 1 on inner bullish WW should be a PL.

Bee

Pt 1 on inner bullish WW should be a PL.

If u are looking for perfect WW it should be PL .
but not necessary for ww that pt 1 is always PL . see target of inner bullish ww reach
and we may reverse to short on bearish WW Black colour if price action suggest.

Thanks
Harish Chheda

Harish
Interesting!!!
Thanks
Bee

We may short Nifty fut only if sideways movement on 5 min break on downside with support of Bearish WW .
This one is similar to what Saint method suggest TFA with higher time frame and pivot low break .

Thanks
Harish Chheda

Nifty Fut WW in last few Candle may complete pt5 of major WW shown in pic. with Black lines

Thanks
Harish

friends and seniors….posting a 5min chart on WW…tgt achieved…

BankNifty Fut ww

Thanks
Harish Chheda

Check out the hourly TF bearish WW minifty with pt 1 at 11 am bar hi. The target is scary. 60 min flow players to go strictly as per the rules.
Bee

Power of WW!!!!!

which 11 am bar BEE, as on which date ?

which 11 am bar BEE, as on which date ?

OOPs soory — 5th Aug. Caught up with many things here. Too many things happening. But going as per my reading [for once at least ;-)]
Bee

WOW more than a 100 points fall in this bar (60 min). Target line hit - pity. Was not expecting such steep fall. Had it taken some more bars then we would have had a better price along the target line (slope). WW is over now just ride the price.
Trade well
Bee

Bearish Wolfe Wave in Reliance Fut Daily

Thanks
Harish Chheda

Harish
This is a daily chart so no compromise on ratios and point place rules. Pt 3 should be higher than 1 and 5 above 3. At best this is a triangle.
Bee

Bee,
plz see this 5min chart of tata steel cash…is this ww

Prem
Seems ok. Draw another target line thru 13:10 bar low. Check the ratios and trade well
Bee

Following up the WW I posted on 31st July, Bee see whether this is the same WW continuing, looks like target is around 4300….

Tushar,

Well done. An exercise for you and a demo for all of us here. This is on a 30 min TF. Please explore the daily or 1 hour or 4 hr bar TF for this WW (for better clarity and resolution) and put up the ratios (actual calculated ratios) for all waves and post here.

I have a break in the data after July 31 when I switched over to Aug month in my metastock data base so am unable to do this exercise. Will have to do something about it for continuity's sake.

Thanks

Bee

Bee that is hourly chart in continuation to my last one….Hope you are talking about 127% and 161% retracement at point 3 n 5 repectively from previous channel point. See if this is correct….

OOPs my error - just counted the bars in a hurry in each square.Anyway will be glad if you can put up the ratios calculations.
Bee

Bee look at the chart above, see if this is correct?

No Tushar - hope you went thru my post giving ratios in this thread. Just put up the calculations of three ratios no chart needed now.
Bee

20 bars between 1 and 3, 27 between 3 and 5 so not a good ratio i guess …. ?

I hope you are talking about the quote from below post

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.

Tushar,

Did you read this post?

http://tradersaint.com/forum/t-172102/wolfe-waves#post-551566

Bee

Sorry Bee, I had missed that post, read about fibonacci role in investopedia link u posted in your first post and from there picked up two ratios.
Here you go for the above wave, the ratios calculated. I guess they fits in:

Points

1.4566.7
2. 4387.5
3. 4606
4. 4415
5. 4678.6

Differences
1-2 = 179.2
2-3 = 218.5
3-4 = 191

Ratios
Point 3 is 1.22 of 1-2
Point 4 is 0.87 of 2-3
Point 5 is 1.38 of 3-4

Please correct if wrong calculations, never did this fibonacci retracement thing before…..

So Tushar you have a near perfect WW. Do not worry if one odd parameter does not fit in perfectly. So please track this WW and put up chart at EOD daily till target reached.
Trade well
Bee

Something for 60 min flow players who are following WWs to ponder. Last 1 hour WW as indicated by me above superimposed on 60 min flow template gave me the confidence to take more adds than I would have taken in normal 60 min flow trade. This cut thru my previous whatever drawdown I had on 60 min sideways flow like an ancient katana blade.

A tip for WW hunters when the trend angle (say upwards) is not very sharp (typically around 30 to 40 degree from the horizontal) then look for WWs to reverse and merge with 60 min flow. Something to check and incorporate slowly in our journey to fine tune this method.

Trade well

Bee

Thanks Bee…..looks like the WW posted on weekend doing well…looks like target of sub 4350 levels will be achieved. I am still not very confident of WW so not trading on it, going with usual adds in 60 min…..

Tushar and all others

Whatever I write are just my thoughts and are not to be incorporated into any of the flow methods until and unless cleared by Saint and have been solidified into rules in the school section.

I write my ideas on this forum as sounding board to have some discussions only.

Thanks

Bee

Friends,

As we have shifted lock, stock and barrel to tradersaintforum. Hence forth kindly post about WW at this link on TSF:
http://www.tradersaintforum.com/forum/showpost.php?p=776&postcount=86

All posts have been transferred there and so all info can be accessed there too.

Thanks and trade well

Bee