Wave Period Oscillator: Zero-Cross and Extreme-Level Signals

Summary

The Wave Period Oscillator (WPO) is presented as a time-cycle oscillator, attributed to a 2018 article in the IFTA Journal. Its described calculation derives a signed period-like value from price and a preceding close, then smooths that value with an exponential-period average. The supplied implementation also defines a range for the averaging period and plots reference levels around zero.

The stated signal convention is bullish when WPO crosses above zero and bearish when it crosses below zero. Levels at 2 and -2 mark overbought and oversold zones, while 2.7 and -2.7 mark more extreme zones. The description also notes that divergences may be considered, as with other oscillators. It supplies no trade examples, backtest, instrument or timeframe guidance, or evidence that the thresholds are predictive. The pasted code includes a fixed period assignment, so its behavior may not match the apparent intent of a user-adjustable setting. Signals and levels should be independently checked before use.

Key ideas

• The WPO is described as a time-cycle oscillator calculated from price changes and smoothed over a configurable period.
• A cross above zero is defined as bullish, while a cross below zero is defined as bearish.
• The indicator marks overbought and oversold levels at 2 and -2, with more extreme levels at 2.7 and -2.7.
• The source mentions divergence analysis but provides no performance evidence or market-specific validation.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.