Every event in this world follows the act of balanced equilibrium, ranging from Human Birth-Death,Weather, Tsunami, Earthquakes, Volcanoes...................................And of course the financial markets.................
In this thread I will be discussing about my trades based on the "BALANCED EQUILIBRIUM" principle......
The most promising techniques which I have studied during the course of years on the Balanced Equilibrium are Wolfe Wave (Discovered by Bill Wolfe) and Chart patterns which I call the foot prints.................
I am not a "Counter Trend " Trader nor a "Trend " Trader , I am just a trader. Many of my fellow traders debate with me that "Trend is your friend" but I believe that "Market is my Mother", it provides you an opportunity to meet your friend and of course your girl friend. :becky:
Explanation of wolf wave - Bullish (from book Street Smart by Linda Raschke):
1. Number 2 wave is a top.
2. Number 3 wave is the bottom of a first decline.
3. Number 1 wave is the bottom prior to wave 2 . Point 3 must be lower than point 1.
4. Number 4 wave is the top of wave 3. The wave 4 point should be higher than the wave 1 bottom.
5. A trend line is drawn from point 1 to point 3. The extension of this line projects to the anticipated reversal point which we will call wave 5.
this is the entry point for a ride to the epa line (1 to 4).
6. The Estimated Price at Arrival (EPA) is the trend line drawn from points 1 to 4. This projects the anticipated price objective. Our initial stop is placed just beneath the newly formed reversal at point 5. It can then be quickly moved to breakeven.
IMPORTANT POINT: 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 buy setup. It must be higher than point 1 for a sell setup. Also, the wave point 4 will be higher than point 1 for a buy setup and lower than 1 for a sell setup.
Note:
1. Heavy VOLUME at point 5 with further decrease in its precedence should be witnessed for the trade initiation
2. For Bullish WW the 1-4 EPA line will make the positive angle with the horizontal and for Bearish WW the 1-4 EPA line will make the negative angle with the horizontal
3. Any other chart pattern in the direction of the trade will increase the probability of achieving the target....
4. The 1-3-5 line and 2-4 line should be converging...............or should have opposite slopes(Angles with the horizontal)
More rules will be posted on how to filter the trade signals, entry and exit strategies..............AS WE PROGRESS:crazy_pilot: