The main idea: we trade the coincidence of the Sweet-zone [SZ, point 5] Wolfe waves and the moment when the price goes beyond the TMA channel.
A non-drawing TMA channel indicator is posted here: viewtopic.php?p=1295508899#p1295508899
Wolfe Wave is a graphical analysis pattern that was discovered and described in detail by Bill Wolfe. The pattern looks like a triangle or a wedge (Wolfe called it 'a rising wedge'), and has a few specific nuances. The graphical method proposed by Bill Wolfe allows to detect a pattern, based on which a moment and direction for entry can be found, and also it helps forecast the target which the price should reach, as well as the time of target reaching.
Rules for determining Wolfe Waves (quote from the article "Wolfe Waves" by Dmitry Fedoseev)
Let us consider Wolfe Waves on the example of buying (Fig. 1). The price forms two consecutively declining lower peaks (blue line, points 1 and 3) and two successively declining higher peaks (points 2 and 4). After the reversal and formation of a peak in point 4, the price continues to fall. Once the price forms
the line 1—3, a buy operation is performed (point 5).
The blue line is the price, the red line is a formation for determining the target. Entry is performed in point 5, the target is point 7
Point 6 at the intersection of lines 1—3 and 2—4 determines target reaching time. The target value (point 7) is defined as the intersection of line 1—4 and the vertical line drawn through point 6. The methodology does not provide stop loss calculation algorithm, and the general advice is to use SL at your discretion. Above were all the wave determining rules from Wolfe's book.
An entry signal appears when the Wolfe Wave Sweet Zone (point 5) coincides with the price going beyond the boundaries of the TMA channel. Examples below:
Good luck!
