Wolfe Wave with 3-5 RSI Divergence
Wolfe Wave Characteristics:
The Symmetry of Waves 1 to 2 is the same as waves 3 to 4
If wave 2 is sharp then it would find support at wave 2 of 1, and if it was flat then it would find support at the Wave 4 of 5 if 5 was extended, or at the main wave 4 itself if wave 5 was not extended then it would find support at main wave 4 of the same degree
The Waves 3 and 4 should stay within the channel created by waves 1 and 2
There are regular time between all waves.
The Third Wave must be lower than the point one for a buy or lower than the wave one for a sell, thus If wave 3 is extended then wave 1 & 5 tend to be equal in length
The Third and Fifth waves are often equal to Fibonacci extensions
The Fifth Wave goes pass the channel created by waves (1) and (3), and there can be the trade signal;
If wave 5 was not extended then it would find support at main wave 4 of the same degree
If wave 5 is extended then wave 1 & 3 tend to be equal in length and it would find support at wave 2 of 5
My Target point for trade is a price along the line created by waves 1 and 4
My Initial stop loss of a trade will be placed just at the newly formed reversal at wave 5, which can move quickly to break-even
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