NiftyMagician : Basics of WW
Posted: Mon Aug 12, 2013 12:19 am
Motto of this discussion is to improve trading skills of well wishers......... so all get ready for this.. and prepare your questions… if having in your mind…
Please open your charts : Amibroker / MT4 so u can your self make some charts hand on this is our first discussion so may be we are allowed to make mistake ... from next time will give some improvement as required. today our topic is WW so on the way to WW we will discuss trend lines wedges or channels today our topic is WW so on the way to WW we will discuss trend lines wedges or channels. Before starting WW we must understand about trend lines
Trendlines : A trend line simple line can be drawn between two or more price pivot points. means connecting high and lows of candles. That actually shows support and resistance and we usually BUY if resistance broken or support taken by script n SELL when support broken and residence taken that shows trend. Below Image shows trendlines.
By drawing multiple trendlines we made some chart patterns and decide trades according to that like triangle wedges flags n all that we all discuss in coming sessions. Next steps towards WW are finding wedges or channels. In simple wedges are like contracting trading ranges mean less oxygen to scripts like NM sir says .. so that lead the scripts to blast ...
Few Days Back I had posted a chart of Nifty in the room :
This is rising wedge in nifty a bearish sign. In above example the nifty is rising but trading ranges is narrowing.. people are Buying Buying n Buying only. This rising wedges is form giving alert to longs .. to be aware and as wedge broken stock will give a good fall.
You can see the Result :
Nifty broke 200 points and still more to come.
Now coming to WW if we are good in drawing smart trend lines and if we are able to find wedges the it will be easy to find WW because some of wedges forms WW. Now we are mixing trendlines with wedges or channels and will count their points as one line is having points 1-3-5 and another line is having points 2-4.
The Below Chart Shows the same :
Chart Showing another Example Of Counting Points In WW is shown below :
Points 1-3-5 on one line and Points 2-4 at another line. Waves 3-4 must stay within the channel created by 1-2. It means either narrowing or parallel not expanding. Wave 1-2 equals waves 3-4 (shows symmetry). Now exception is that point 5, point 5 can break the 1-3-5 trendline to show some divergence. It means to say that if point 5 broken is line and above this line that mean its hint for us to be prepare... to HIT. That is call Sweet Zone.
Now about Targets, we need to made a new trend line for that is ... that is connecting point 1 and point 4. This is shown in below chart :
This chart I had posted in room two days back. Yesterday Tatamotors fell and took support exact at points 2-4 line..
Now we are connecting point 1 and point 4 which is giving your target line...
Now target line is point 1- point 4 line............... This is called EPA -Estimated Price at Arrival which is our target price also. But WW gives Expected Time Also. It means the point where line containing points 1-3-5 crossing the line containing points 2-4. This Point is ETA - Estimated Time of Arrival. In short, Estimated Time of Arrival (ETA) is apex of extended trend line of points 1 to 3 and trend line of points 2 to 4.