Wolfnen indicator. Automatic construction of Wulf waves
Wave theory, unlike other methods of market analysis, allows you to clearly predict further price movements and build long-term forecasts.
Inspired traders and followers of wave theory created their own approaches, and one of the most popular wave branches became the famous “Wolfe Waves”.
The Wolfnen indicator is a technical analysis tool that allows you to build Wolf waves completely automatically.
It is worth noting that Wolfe waves are equally effective on any time frame that you use.
Since the wave-like structure is present at any time interval. It should also be mentioned that the tool is multi-currency and allows automatic marking not only on currency pairs, but also on CFDs.
The Wolfnen indicator can be classified as a relatively new custom development, so this tool is not available by default in any trading platform.
Therefore, in order for you to use the indicator, you will need to go to the end of the article and download the tool, and then install it in your MT4 trading terminal.
The installation process for the Wolfnen indicator follows a standard procedure and is no different from installing any other custom indicator, namely, you will need to drop the downloaded file into the appropriate folder in the terminal data directory.
After restarting the platform, Wolfnen will appear in the list of custom indicators, and in order to start using it, just drag the name of the instrument onto the chart.
Indicator signals
When working with Wolfe waves, it is worth understanding that only the fifth wave is taken into account, which connects points 5, 6 and is the very reversal wave symbolizing a trend change.
It is worth understanding that there are both bullish and bearish Wolfe wave formations, and the fundamental difference between them is only in the trend sections on which they are built (upward or downward trend).
A sell or buy position (depending on the bullish or bearish formation) should be opened only after the fifth point has formed and a small rollback has occurred.
When opening a position, the reference point and goal is the red line, which is drawn through points 1 and 4. Example:
The principle of constructing the indicator. Settings
The biggest drawback of any wave theory is the subjectivity of construction. The fact is that each trader can see and find extreme points differently, and as a result, using the same construction method, traders can give completely different forecasts.
That is why the Wolfnen indicator was based on an algorithm for determining extreme points using the ZigZag indicator, which made it possible to discard subjectivity in the search for extreme points.
So in the ExtDepth line you can specify the depth value of the ZigZag indicator, and in the ExtDeviation line you can set the deviation. In the ExtDeviation line, you can set the minimum number of candles between the local minimum and maximum to build the ray of the ZigZag indicator.
In conclusion, it is worth noting that the Wolfnen indicator is primarily an assistant that allows you to very quickly build Wolf waves.
However, like any technical indicator based on wave theory, it can often make incorrect markings, so before taking signals into account, it is better to double-check everything.
Download the Wolfnen indicator.