When is the Bullish Wolfe Wave confirmed?

Lows 1, 3, 5 and highs 2, 4: 3 below 1, 4 between 1 and 2, the 2-4 line falling faster than the 1-3 line, 5 below 3 and below the 1-3 line. Once 5 is confirmed (a 4% bounce on Bitcoin, 5% on stocks), a candle CLOSES above the high of the point 5 candle within 5 candles.

When is the Bullish Wolfe Wave invalid?

Price trades below point 5 before that close.

Bullish Wolfe Wave

BullishReversalAdvanced

A falling wedge whose last low fakes a breakdown. The target is drawn from point 1.

Verdict: SkipBitcoin 4H: 46 trades, won 44%, avg trade −1.2% vs random day +0.4%. Backtest

Bullish Wolfe Wave: textbook shape, step by step

Number the swings. Point one is a low, point two the next high.

step 1/8

Trade rules

Direction	Long (buy)
Entry	Lows 1, 3, 5 and highs 2, 4: 3 below 1, 4 between 1 and 2, the 2-4 line falling faster than the 1-3 line, 5 below 3 and below the 1-3 line. Once 5 is confirmed (a 4% bounce on Bitcoin, 5% on stocks), a candle CLOSES above the high of the point 5 candle within 5 candles.
Cancelled if	Price trades below point 5 before that close.
Target	Up to the 1-4 line

3 common mistakes

Buying the first poke below the 1-3 line, before point 5 has bottomed.
Forcing the count: point 4 has to stay above point 1.
Drawing the 1-4 target from the wrong points, which moves the target a lot.

Backtest

same rules every time · equal size · no fees · method

Market	Trades	Won	Avg trade	Random day
Bitcoin · 4H · 2017-2026	46	44%	−1.22%	+0.43%
US large caps (50) · 1D · 2016-2026	361	52%	+0.71%	+1.36%

Verdict: SkipNever beat a random entry, and lost money in some markets.

pattern −56%random +20%

Bitcoin 4H: pattern −56% vs random day +20% over 46 trades

pattern +258%random +492%

US large caps (50) 1D: pattern +258% vs random day +492% over 361 trades

Real examples

Bitcoin · 12H

Breakout Apr 7, 2025, exit Apr 21, 2025 (target)+11.27%

1-3 linePoint 5 high1-4 line181,279 · Mar 30, 2025288,500 · Apr 2, 2025381,211 · Apr 3, 2025484,720 · Apr 4, 2025574,508 · Apr 7, 2025Entry

Bitcoin 12H, real candles from Mar 31, 2025

Apple · 1D

Breakout Jun 4, 2019, exit Jun 10, 2019 (target)+8.65%

1-3 linePoint 5 high1-4 line146.15 · Mar 26, 2019253.83 · May 1, 2019345.71 · May 13, 2019448.12 · May 16, 2019542.57 · Jun 3, 2019Entry

Apple 1D, real candles from Mar 26, 2019

Nike · 1D

trapBreakout May 13, 2022, exit May 25, 2022 (stop)−8.40%

1-3 linePoint 5 high1-4 line1124.32 · Apr 11, 20222139.14 · Apr 21, 20223120.48 · Apr 26, 20224128.45 · Apr 29, 20225105.00 · May 12, 2022Entry

Nike 1D, real candles from Apr 11, 2022