The Wolf Wave is a very common pattern in technical analysis of financial markets. It consists of five waves that accurately predict the range of price changes.
Used correctly, it is surprisingly accurate and can be used to predict the direction of prices and how long it will take to reach a target price.
As the name suggests, the Wolfe Waves trading system is based on the chart pattern of Wolfe waves, an interesting price behavior trading strategy to say the least.
Wolf Wave is a technical analysis method to analyze the pattern of price movements. This analysis method can also be used in stock, foreign exchange and commodity futures markets.
This method is a graphical analysis pattern first discovered and described by Bill Wolfe.
The Wolf wave chart form looks like a triangle or wedge (Wolf calls it a “rising wedge”) and has some special nuances.
This method of trading can detect a pattern from which the time and direction of entry can be found, and is beneficial for predicting where the price will be and when it will be reached.
One of the most important things to identify the shape of a Wolf wave is its symmetry, shown here, which is the basic shape of a Wolf wave.
1. When you observe and confirm the chart shape of the “Wolf waveform”, you can almost go short on the higher trend channel and long on the lower trend channel.
2. The diagonal price channel trading strategy is built around this concept, which is one of the foreign exchange trading strategies we often use. This price channel setting often forms many price behavior trading signals.
Below is an example of a rising price channel that you can buy and sell based on a diagonal price channel FX trading strategy: # Wolf Wave trading rules The following rules will help you identify and draw Wolf wave patterns.
Waves 3-4 must be in the channel constructed by waves 1-2;
Waves 1-2 are similar to waves 3-4 (showing symmetry);
A regular time between all the waves;
Wave 5 exceeds the trend line constructed by waves 1 and 3 and is the entry point;
The intersection point 6 of the extension lines of wave 1-3 and wave 2-4 is the arrival time of the predicted target.
The target price (point 7) is defined as the intersection of the wave 1-4 extension line and the vertical line drawn through point 6;
Use stop-loss at your discretion.
In addition, you must know what the bullish and bearish Wolf waveforms look like, be able to recognize and validate them, and know how to draw EPA lines.
The intersection point 6 of the 1-3 and 2-4 extension lines is the arrival time of the detection target.
The target price (point 7) is defined as the intersection of the 1-4 extension line and the vertical line drawn through point 6.
This method does not provide a stop loss calculation algorithm, and it is generally recommended that you use the stop loss at your discretion.
The above are the waveform detection rules described in Wolff’s book.
As you develop the metrics for this article, you’ll find more rules.
Point 3 must be well below point 1, and the following conditions should be checked :v3<v1-d1 here: the price of v3 — point 3;
v1 — price point 1;
d1 — The vertical distance between point 1 and point 2 (line segment 1 “-2”) multiplied by K1 (K1 is the parameter of the property window and has a tacit missing value of 0.1).
The 1-4 extension line of the detection target must be upward, that is, point 4 must be much higher than point 1.
The following conditions should be checked :v4>v1+d1;
v4 — the price of point 4.
Point 4 must be well below point 2, and the following conditions should be checked :v4<v2-d2;
Here v2 is the price point of point 2, and d2 is the vertical distance between point 2 and point 3 (line segment 2 “-3”) multiplied by K2 (K2 is the parameter of the property window with a tacit deficiency value of 0.1).
The extension lines 2-4 and 1-3 of the arrival time of the detection target must meet on the right side, so the height of 2-2′ must be much higher than that of 4-4′.
The following checks must be performed here: H2-H4 >K3*h2;
Here h2 is the height of line segment 2-2′, h4 is the height of line segment 4-4′, and K3 is the ratio (K3 is the parameter of the property window with a value of 0.1).
These rule statements do not assume infallibility.
We will describe this in more detail later in the metrics creation process.
Based on this material, you can tweak the code as you see fit.
Select the word polyline to use before we begin by downloading the attachment, which contains many generic word polylines
