Extraction of flying target position information is the prerequisite for passive infrared guided missiles to track the target. The existing missile detection system senses the targets infrared radiation, and then the generated signal is sent to signal processing circuits for extracting the target position information. In order to improve anti-interference capacity of the detection system, an algorithm of module maximum edge detection based on the bi-orthogonal wavelets is proposed to replace its hardware. The signal can be decomposed in one layer, only its high frequency detail is reconstructed. After some calculations, the average target position can be obtained. The algorithms real-time implementation with DSP is also discussed. To reduce the execution time, the program structure can be optimized with double buffers in memory. This implementation is verified by simulations. The results show that the method has only a small amount of calculations, can meet the requirements for finding out the target position in real-time and needs not the traditional processing circuit.