FC
“Wolve Waves in a Nutshell”
Here is a brief description on Wolve Waves as you’ve never seen before. You will notice that the following rules differ to published rules.
For a bearish Wolfe Wave:
Look for a bottom (e.g. point 2)
Point 3 is the top of the first rally
Point 1 is where a horizontal line, drawn from point 3, intersects with the rally prior to point 2.
Point 4 is the bottom of the decline after point 3 and should be +50% retracement of point 2 and 3.
Point 5 is the top after point 4 and is likely to exceed the extended line 1-3.
NB. Point 4 must have formed to identify potential Wolfe Waves.
Draw extended line 1-3
Draw extended line 1-4
Draw extended line 2-4
Draw parallel line of line 2-4 that intersects with point 3
On the attached chart, the shaded area between extended line 1-3 and the line parallel to line 2-4 is called the buy/sell zone. This is the entry point for a ride to line 1-4 (EPA)
Estimated Price at Arrival (EPA) is extended line 1-4.
Estimated Time of Arrival (ETA) is apex of extended line of top of rally prior to point 1 (point PT on attached chart) and point 2 to 4. Draw vertical line from apex down to line 1-4. The EPA and ETA are where these lines intersect (point T on attached chart).
For a bullish Wolfe Wave, reverse the above.
Please note that Wolfe Waves need to be confirmed with volume, which is not available on Forex. They do, however, work well on futures.
