The setups I include on this blog are used in conjunction with the 3/10macd and the criteria I ascribe to it as a way to alert me to an existing condition of price. The key concept to take away from this blog is that I try to anticipate what will happen on the higher time frame by using a faster time frame to trigger the trade setup. I do not trade a "system" I use two indicators to clue me in to price conditions. Please read the Disclaimer located in the sidebar of this site. I can be contacted via email at email@example.com
I am always open to questions, comments, or suggestions on how to improve this blog.
Sunday, November 15, 2009
Looking at the Dow Jones Equity REIT Index I noticed a Bearish Wolfe Wave that developed throughout much of this year. As it reached point 5 (where one is to enter a short position with a target of the 1-4 line) it began to unfold as expected. However, price found support at the 1-3 line and turned around, morphing into a contrary wave (a bullish Wolfe Wave within this bearish Wolfe Wave). These contrary waves can develop as seen here, or even within two separate time frames intr-day.Fortunately in this example you would have been able to exit with a profit or at break-even. But it is a good example in monitoring the health of these patterns throughout their cycle, especially around the 1-3 line where price can find support (2-4 line resistance in a bullish wave) when making a move to their target line.