Wave Trend Oscillator Indicator
Platform: MT4 Type: Oscillator Last update: September 25, 2024The Wave Trend Oscillator Indicator is a popular and widely used indicator for finding market tops and bottoms. It’s a great tool for identifying swings and taking advantage of these moves. In good hands, it helps to use strategic turning points for high winning rates.
Anatomy of the Wave Trend Oscillator indicator
As the name suggests, it is an oscillator, thus it provides overbought and oversold market levels. In other words, these levels are where the price is most likely to reverse. By default, the overbought state is considered when both oscillator lines rise above the 53 level. Conversely, the oversold state is considered when both oscillator lines drop below the -53 level. When you load up the indicator, it should look like this:
If you want to customize settings, you have the following inputs available:
Buy Signal
Follow these steps for a long trade:
- Both oscillator lines drops to oversold level
- It stay is oversold area for at least 3 consecutive bars
- Oscillator lines cross to the upside and rises above oversold level
- Bullish candlestick is formed
- Buy trade is now triggered
- Set stop loss a few pips below the most recent market low
- Take profit after reaching satisfying risk to reward ratio
Sell Signal
Follow these steps for a short trade:
- Both oscillator lines rises to overbought level
- It stay is overbought area for at least 3 consecutive bars
- Oscillator lines cross to the downside and drops below overbought level
- Bearish candlestick is formed
- Sell trade is now triggered
- Set stop loss a few pips above the most recent market high
- Take profit after reaching satisfying risk to reward ratio
