D-Wave is an objective form of wave analysis. It defines price waves mechanically. D-Wave uses patterns that are defined by a series of Fibonnaci highs and lows. This approach makes D-Wave objective, e.g., Wave 1 could be identified as an 8 bar high, a high higher than all previous 7 bars' highs. The succeeding waves 2, 3, 4, and 5, as well as the correction waves, use Fibonnaci numbers.


D-Wave displays waves according to the following logic:

For Up-Waves,

High of 1 is less than the low of 4, and

High of 1 is less than the high of 3, and

High of 3 is less than the high of 5.

For Down-Waves,

Low of 1 is greater than the high of 4, and

Low of 1 is greater than the low of 3, and

Low of 3 is greater than the low of 5.

Level / Price

Wave Start-21 Low

Wave 1-8 High

Wave 2-5 Low

Wave 3-13 High

Wave 4-8 Low

Wave 5-21 High

Wave A-13 Low

Wave B-8 High

Wave C-21 Low

Reverse logic for sells.

For further information on D-Wave, please refer to Thomas R. DeMark, The New Science of Technical Analysis, New York: John Wiley & Sons, 1994, Chapter 4, Wave Analysis.