As an important part of the electro-optic technology, the PSD (position sensitive detector) technology is widely applied in various subject fields. The precision damand for PSD system signal is becoming more and more strict. It requests a better method to reduce the noise of PSD system signal. In view of the PSD system signal characteristic, the db8, sym8, coif8 are choosed to process and compare with the signal which contains chirp. And the simulation is done by the wavelet GUI in the MATLAB software. In order to obtain the most suitable wavelet processing method, the simulation resuls are compared. The simulation results indicate that the algorithm can provide a better way for filtering and de-noising.