Good evening, Dear friends! Indicators are an integral part of all technical analysis, they simplify our lives and help to analyze the situation on the market. In this article we will look at a pretty interesting indicator called Trend Wave. In concept it is an oscillator and like many other oscillators Forex has its own distinctive features, which we will explore.
The Oscillators Forex. General information about Trend Wave
As mentioned earlier, the indicator is an oscillator, respectively, it has characteristic features. First of all, it should be used during the development of a clear trend in the market.
Its application in consolidation periods will be senseless, as it for a long time will hover in the areas of oversold and overbought, forming numerous unprofitable signals. After installation of this indicator on the price chart, You will see the following picture:
Appearance Trend Wave
Many traders will recognize this similarity indicator the stochastic oscillator. Indeed, the Trend Wave is similar to it, but the similarity just ends with the visual properties. The basis of the Trend Wave has a special formula that is designed in every way to smooth out the strong price fluctuations. Some traders are confident that this indicator is the embodiment of the break-even system, however, it’s too loud statement!
As the basic time interval for trading, the most suitable five-minute timeframe. After some time the indicator, we concluded that this interval allows the emergence of a large number of signals, their accuracy is quite high.
If you touch the indicator settings, it has two main parameters: Wave period (10 by default), Avg period (21 by default). If these two variables increase, the indicator will automatically become less sensitive to the dynamics of the market.
As a result, the total number of signals is significantly reduced, but their accuracy in theory should be higher. If these variables decrease, the indicator will begin to show increased sensitivity to the movement of the market. Thus, it will generate more signals, but their accuracy will be worse.
In principle, even if you use all the default settings, they just provide some balance between the number of signals and their overall quality.
The Oscillators Forex. Trading signals
In General, all signals indicator Trend Wave is similar to a stochastic oscillator. Let’s look at an example of a trading signal for opening long positions.
Opening long positions
In the figure we see that there’s a major point Golubogo color (in the settings you can set the notification sound in the formation point). In this case, the market was in an oversold condition and there were preconditions to the reversal of the market.
As we see next, the price really moved in an upward direction, and was able to get a pretty good profit.
As for sales, we need to wait for the formation of yellow dots that will signal us about the formation of an overbought market. Consider this example:
Opening short positions
As we have seen, formed yellow dot, respectively, it was possible to open short positions, which in our case would have been profitable.
Generally speaking, this indicator is best for intraday trading, with indicators, it is desirable to filter using other tools. You must understand that only one indicator is not enough for qualitative assessment of the market situation!
The Oscillators Forex. Conclusions about the Trend Wave
Generally speaking, this indicator is quite interesting, but yet to fully hope it is not necessary. Again, as an oscillator, it will work perfectly in times of flat, but the trend of him will be of very little avail.
We can also recommend when using this indicator, put a small trading goals, usually not more than 20 points. Let’s be objective trading on M5, there is no reason to expect profit at 150-200 points.
Always remember that the main role plays a proper money management and the ability to manage own emotions. Any indicator is only an additional tool that will help You to analyze the market.
However, we should not expect that using only one tool, You will always be in profit. Anyway, but the losses from time to time will happen, as they are an integral part of trading. We wish You good luck and lots of profit!