Building Trading Indicators from Triangular and Sawtooth Waves
Summary
The article derives price indicators from triangular and sawtooth window functions. It explains how combining moving-average coefficients produces a triangular weighting pattern, then extends the construction with multiple wave periods and separated components. Triangular waves smooth prices and can highlight oscillations; sawtooth waves provide asymmetric weights intended to reveal trends and trend channels. The author also describes line and oscillator variants that condense the wave calculations into more familiar indicator displays.
Several trading ideas are proposed: price or indicator crossovers, signals based on indicator extremes, and oscillator rules that trade reversals from local highs or lows. The article presents these as candidate strategies, but provides no quantified performance evidence or detailed validation. It notes that smoothing can introduce lag, small-period waves can be noise-sensitive, and signals may be delayed when historical window values are recalculated. The suggested approaches therefore need further testing and risk controls.
Key ideas
- Combining consecutive moving-average coefficients can create a triangular window for smoothing prices.
- Multiple wave periods can be combined, though shorter periods may respond more strongly to noise.
- Sawtooth weighting is used to represent directional asymmetry and divide trends into channels.
- Wave-derived indicators can be turned into line or oscillator formats.
- The proposed crossover and mean-reversion strategies are exploratory and require validation and risk management.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.