# Wolfe Waves Indicator

Wolfe Waves Indicator is one of the numerous methods for market analysis. The method based on Wolfe Waves does not imply application of an indicator, it uses wave analysis. The author of strategy is a professional trader and analyst Bill Wolfe. The difference of analysis based on Wolfe Waves from Elliot Waves Theory is that analysis is made on the spot, because marking is not required on high or low time-frames.

A notable benefit of this analytical method is simplicity of operation. Wolfe Waves theory is based on Newton law saying that "every action has an equal and an opposite reaction".

While trading this method, one can find not only change of trend, but also entrance points upon completing of correction in existing tendency. One should not forget the rule implying that trend is our friend. Making trades along trend, we improve performance of our transactions, because more often continuation patterns turn to be veracious.

Success of our trades made as per this method does not depend only on knowledge, but requires practice of application as well. Daily analysis and practice taken together will bring a result for sure and trader will be able to define Wolfe Waves on chart without mistake. The best performance of this method is shown with volatile instruments.

## Bullish Wolfe Wave

Bullish representation of WW look like series of multidirectional waves with each of them market by a certain digit.

1 waveLow of the first wave (bottom)

2 waveHigh of the first wave

3 wave End of 2nd and beginning of 3rd

4 waveBottom of 4th and top of 3rd

5 waveturning point. On this very level (as per present price) trade is opened

6 wavepoint of closure

## Bearish Wolfe Wave

Bearish model is totally opposite to bullish model.

As in bullish model, entrance to market is made on 5th wave and exit is in 6 point. Originally, trader might have troubles with determining bullish and bearish models of WW. But experienced traders may be confused with the rules, therefore, a good knowledge of theoretical part is required.

## Advantages of using Wolfe Wave Indicator in analysis

1. Strategy suits both professionals and beginners.
2. No supplementary indicators and tools of technical analysis are required.
3. Simple rules for entrance and exit.