Wave Modeling 1.5

As a small aside note, I do intend on building this wave thing up to something like wave modeling 6.0 someday. So each improvement warrants it’s own post.

Here we have the waves broken down after I’ve already broken them down to most of the movement. Currently A/B/C/D waves under my new filters account for 98.12% percent of days.

Each wave has two types: the UP version and the DOWN version. I didn’t have a great way to show each type without too much clutter, so for example, Type 1 of the A Wave is H. This kind of day moves only up, and never breaks the low.  Type 2 of the C wave for example is HLH. This kind of day makes a Higher Higher, then a Lower Low, then another Higher High that breaks the original high of the day (after including the new filter definitions).

The second chart shows these numbers as percentages within the waves. If I know for certain that an “B” wave is occurring, the chance that a Type 2 wave is occurring is 53%. They are all more or less 50-50, with the exception of the D wave which doesn’t have much data to begin with.

The third chart shows these numbers as percentages of all the data. The Type 2 of the B wave occurs 22.24% of the time.


Edit 02/14/2014:

Cleaned it up yet again. I really don’t mind redoing statistics since I almost always end up getting cleaner and more accurate statistics. This is my best yet:


Any other statistics have not been redone.

I figured the following idea would fail, but it never hurts to try. I tried to look at the minimum percentage that a wave will retrace to on average. What if the first retracement on an “A” wave commonly retraces to something between 20-30%, whereas the first retracement on a “B” wave commonly retraces to something like 50-60%? Thus, but just seeing where current min retracement is, it could give you a better idea of what kind of wave is occurring.

A careful look will show that the “A” and “C” waves show Type 1 first, while the “B” and “D” waves show type 2 first. This is because I column sorted it for net price moves. A type 1 “A” move is net up move, while a type 2 “B” wave is a net up move


The first number is the Average percentage, the second is the Standard deviation. Given the high numbers on the STDEV, I don’t think there’s much here yet.

Here is the same picture with the “fixed” type 1 versus type 2 to better answer the question posed earlier.

attempt2It appears that on the first retrace, the less complex waves retrace to a higher percentage, or in other words, the more complex waves retrace deeper. If the STDEVs weren’t so high, there’s a lot to look at. Even with such variation, there may be something useful here.



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