Glossary

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Wolfe Waves
According to many traders, this is the one of the most efficient and profitable trading strategies in the Forex market (see). It is based, as the name implies, on waves that can be seen on the chart (see). The wave is formed from Newton's famous law: every action has a reaction. That is, if the price went up, clearly it will soon go down. Best of all, such a wave is drawn by tools with high volatility (see). Of coursem Wolfe waves don't always form, there are certain rules. For example, one must find four points on the graph, that show a down up down up movement, then the fourth point should be higher that the first. It is guaranteed that the wave continues forward. Futher information about this interesting strategy can be found in the book “Street Smarts: High probability short-term trading strategies” by L. Connors and L. Raschke.

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