Analysis on the shaft orbit of hydraulic generator is important for diagnosing fault vibration of generator sets. To identify the shaft orbit among noisy signals, an improved soft threshold denoising method is proposed on the basis of traditional soft-threshold wavelet de-noising and hard-threshold wavelet de-noising. Computer simulation results show that this new method could achieve satisfactory results for de-noising and orbit identification. Apart from the above three methods, harmonic wavelet analysis is also introduced to identify shaft orbits. Comparison and analysis of the results reveal that the harmonic wavelet analysis is more efficient and convenient with the highest signal to noise ratio.