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Sunday, July 12, 2009

Learning about Wolfe Waves

I enjoy learning about other techniques, and came across the Wolfe Wave. At first it seemed impossible to find any good setups for this technique, but after playing with it for several hours I think I'm beginning to see the patterns. I'm finding it interesting, and in some ways relative to the Elliott Wave.

The next two charts show what I believe to be past examples of how the the Wolfe Wave was able to forecast a trade.

The idea is to find waves of a similar nature that relate by time and price. In other words they have a rhythm. That's how I see it, but I'm just learning.

After finding the first four points the traditional trend lines are drawn. Then a line from the apex of points 1 and 4 is also drawn. This will be your "Target Line"

When the price crosses the trend line at Point 5 you place your trade with a close stop.

Now you simply wait until the price reaches the target line.

In a case where the trend lines cross such as in the second chart; the apex provides the Target Date.

I'm intrigued by the method, and in an effort to test what I think I've learned; I created the next two Wolfe Wave setups. These both require a pull back below the trend line to complete the Wolfe Wave setup with (Point 5). That will be the signal to go long.

It will be interesting to see if either of these work out. Please remember I'm just learning about this, and may not understand the method clearly just yet. But I would encourage you to Google it, and find out more for yourself.

Analysis presented on this blog has only informational and educational purpose and does not represent a proposal for buying or selling currency contracts.


  1. Bob, how did you determine apex (6) for the expanding diagonal ? It makes sense in a ending or leading diagonal to find apex. Maybe I'm just blind :0 TIA

  2. hey bob, on your wolf waves i listed 2 interesting sites below. the first was almost exclusively wolfe wave last year, but i just looked at the site and it was all h&s in the latest post. the second site does a good free job of screening for wolfe wave setups.. i followed and used both sites for more than a year and was not able profitably us the technique. good luck

  3. Hindawg,

    In an expanding diagonal it is not possible to determime the time an apen for timing. It's simply a matter of arriving at the Target Line.

    I have done some back testing of apex points and how they relate to timing, and while it's not something I would bet the farm on, it is very often correct.

  4. ohunt,

    Thanks for the links!

    I think Wolfe Waves work, but there are too many times when you wait for the 5th point, and it never arrives. It seems like too much time and commitment wasted.

    I'll continue to look for the setup, but I doubt it will be one of my favorite trading tools.

    Hey, I don't have many readers who respond to my posts, and I really appreciate that you do respond. I'm wondering if you have any criticism or praise for my new count. I feel like I'm out in left field with this scenario.

    Most of the other blogs are looking for something to happen very soon.

    Do you have any feelings about this?



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