I just noticed this …
I used to trade Wolfe Waves with another trader out of Montana. I took Bill Wolfe’s course and worked on this trading method diligently. In fact, it was trading Wolfe Waves that got me deep into Wyckoff’s work. At the 5-point in a Wolfe Wave, there was often high volume that seemed to turn the market. Being a novice in volume, I couldn’t understand why high volume at the top of the Wolfe Wave would be bearish. Thus started my Wyckoff journey …
This is a classic Wolfe Wave on the daily ES chart. Wolfe Waves are formed by a specific, five wave sequence. I’ve highlighted the key waves here. This one has all the characteristices of a valid Wolfe Wave.
The 1-4 points serve as a projection of the distance a trader can expect the Wolfe Wave to travel. The 1-4 line shows this. This 1-4 line also has certain characteristics that are not always present and that indicate a particularly strong likelihood of meeting, if not exceeding the projection.
Wolfe Waves can be uncanny in their ability to highlight turns in the market and in their projections. Like all trading, they are not mechanical and there are several characteristics and nuances which must be mastered to trade well. Nonetheless, it will be fun to watch this one. The Wolfe Wave is totally unrelated to Wyckoff’s Wave.
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