WaveTrend Crossover Backtest with Selectable Signal Strength
Summary
This document describes a long-only backtest built around WaveTrend oscillator crossovers. The oscillator uses a selectable price source, channel and averaging lengths, and either simple or exponential smoothing for its signal line. A crossover upward can open a long position, while a downward crossover can close it. The user can independently choose whether entries and exits use every crossover or only stronger ones, defined by the oscillator crossing in oversold or overbought territory.
The strategy displays both strong and weaker crossover markers and sends trades to TradingView’s Strategy Tester. Its stated defaults use full-equity position sizing, a starting capital value, and percentage commission, while the settings can be changed. The accompanying explanation cautions that fills are modeled at bar close, slippage is omitted, and the approach is long-only and concentrated by default. It also warns that sparse higher-timeframe trades and tuning settings to fit historical data limit conclusions. No actual performance figures are presented, so the document offers a testable rule set rather than evidence that it works live.
Key ideas
- WaveTrend line crossovers define candidate long entries and exits.
- Strong signals require crossovers beyond configured oversold or overbought thresholds.
- Buy and sell signal strength can be selected independently.
- The backtest models commission but omits slippage and uses bar-close fills.
- Full-equity sizing, limited trade samples, and curve fitting are stated limitations.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.