“Whenever a trend line is broken, it is almost a guarantee that you will find a Wave. Initially, heavy selling drops the price below support of the trend line. As the price struggles to get back,it meets resistance. The ingredients are in place and the motion acts naturally and forms a Wave (See greenish volume indicator).”
“What I do is parallel points 2 and 4 to point 3 and in some cases point 1. The area from the price of point 3, to the parallel of points 2 and 4 to point 3 is the sweet zone. This can be extremely valuable as it alerts you to potential risk”
“Signs that a Wave will not make it to the 1 to 4 target line.
A poorly formed Wave has less of a chance than a well formed Wave. If volume is not relatively heavy (see red line) at the 5 point, you should be suspicious. As the price reverses, the volume should decrease. If it does not, move to a shorter time frame and be on the look out for a contrary Wave forming. Get out at the first sign of trouble and wait for the next Wave to form. If you entered in the ‘sweet zone’ you probably have a profit anyway.”
“What I do is parallel points 2 and 4 to point 3 and in some cases point 1. The area from the price of point 3, to the parallel of points 2 and 4 to point 3 is the sweet zone. This can be extremely valuable as it alerts you to potential risk”
“Signs that a Wave will not make it to the 1 to 4 target line.
A poorly formed Wave has less of a chance than a well formed Wave. If volume is not relatively heavy (see red line) at the 5 point, you should be suspicious. As the price reverses, the volume should decrease. If it does not, move to a shorter time frame and be on the look out for a contrary Wave forming. Get out at the first sign of trouble and wait for the next Wave to form. If you entered in the ‘sweet zone’ you probably have a profit anyway.”
Had used " ..." as all remarks are in the language of Bill Wolfe.
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