Here are some key points to remember for identifying Wolfe Waves:
- Waves 3-4 must stay within the channel created by waves 1-2.
- Waves 1-2 equal waves 3-4 (showing symmetry).
- Wave 4 revisits the channel of points established by waves 1-2.
- There should be regular timing intervals between waves.
- Waves 3 and 5 are usually 127% or 162% (Fibonacci) extensions of the previous channel point.
The pattern can be found in:
- Rising channels in an uptrend. (Bearish)
- Falling channels in a downtrend. (Bullish)
- Level channels during consolidation periods.
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