Wolfe Waves and Rectangles

I'll sum it up with this picture....

In response to my previous posts on using rectangles to measure Time in Wolfe Waves.

Wolfe Waves - Rectangles, Follow Up CADCHF

This is a follow up to the analysis posted here, on 11th July. So far we have noticed that price has come out of the cloned rectangle from points 1 & 2. We infer that the peak has been formed and as such taking a short position is confirmed. In terms of target price, we have 0.89049, with the estimated date for arrival at the price being 17th of 18th July. For now, we'll have to wait until next week to see how this plays out.

CADCHF - Follow Up Wolfe Waves

Wolfe Wave - Rectangles - Experiment 2

In this experiment, we'll look at USDCAD Pair.

USDCAD - Wolfe Wave Experiment

From the chart below, it is obvious that price failed to touch the peak of 1.08193. However, we cannot assume that price has started a downward trend. As long as price is still in the rectangle, we have to assume the underlying theme, which is a probable price move towards 1.08193. Our ETA for price to come out of this rectangle is 23rd August.

Our target price is projected at 0.9683 which is expected to reach around 30th of September.

For now, we'll have to wait and watch.

Wolfe Waves - Tweaking the methodology

It is common knowledge that Wolfe Waves is used for trading reversal price points. However, there is a bit of subjectivity involved. Realistically speaking, a trader might either take a position a bit too early or perhaps a bit too late. Trying to get into the trade at the right time is perhaps what we all would like to achieve.

In my search for figuring the Wolfe waves, I came across this rather simple solution of using Rectangles.

In the picture below, I first plotted the Wolfe waves (bearish), including cloning TL 2 - 4 and projecting this from Point 3. This TL projection gives us the possible area of reversal for Wave 5. However, if we go simply by the projection, the reversal could happen anywhere.

Wolfe Waves - CADCHF, with Rectangle

Now I introduce a rectangle, from Point 1 - 2. This rectangle basically covers the pip distance and time as well. Cloning this rectangle and projecting it from Point 4, gives us a better estimate of the pip distance that will be traveled for Wave 5.

Calculating End of Wave 5

While I am not completely sure about this, to calculate the potential move for the Wolfe Wave, I now plot a rectangle between points 3 - 4, but this time taking into account the complete price move, i.e: if price between 2 and 4 is lower we take that into consideration as well.

Finally, cloning this rectangle from the end of the previously cloned rectangle should give us a possible idea. In this case for CADCHF, I expect price t reach 0.88765 around 18th of July.

Let's see if this works.