Wave Trend and VWMA Signals for Trend Following

Summary

This strategy uses Wave Trend crossovers to time entries and exits, while VWMA bands determine position size. Wave Trend is built from an EMA-smoothed price deviation and a second smoothed line; crossing above that line signals a long entry, while crossing below signals a short entry. VWMA classifies price as bullish, neutral, or bearish according to whether it closes above, within, or below volume-weighted bands. The code scales orders according to that classification and adjusts order size when reversing an existing position.

The published example is a BTC/USDT Binance futures backtest on hourly bars, with 15-minute base data, covering roughly one month. No performance statistics or comparison are provided, so the example does not establish profitability. The described risks include false oscillator signals, unreliable volume data, and the absence of a stop-loss rule. Trading-session settings and end-of-session closure options are included, but the code's order logic does not visibly gate entries on the session condition, limiting how confidently those controls can be interpreted.

Key ideas

• Wave Trend line crossovers provide the strategy's directional entry signals.
• VWMA band position assigns bullish, neutral, or bearish states that scale order size.
• The example uses BTC/USDT futures data on hourly bars with 15-minute base data.
• The source identifies false signals, uncertain volume quality, and the lack of stop losses as risks.

Tags

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