WaveTrend Crossover Strategy with Overbought and Oversold Filters

Summary

This Pine Script strategy turns a WaveTrend oscillator into long entry and exit signals. It computes a normalized deviation of a chosen price source from an exponential average, smooths that measure, and detects crossovers between the resulting wave and its signal line. Strong buy signals require an upward crossover below an oversold boundary; strong sell signals require a downward crossover above an overbought boundary.

Users can choose whether entries and exits respond only to these strong signals or to every crossover. The script sizes orders as a percentage of equity, specifies initial capital and commission, and displays the oscillator and signal markers for review in TradingView's strategy tools. It defines a testable signal framework, but the document provides no performance results or asset and period analysis. Its usefulness therefore depends on testing across relevant markets and timeframes, including the effects of costs and the chosen thresholds.

Key ideas

• The strategy derives WaveTrend waves from a selected price source using exponential smoothing.
• Crossovers between the main wave and its signal line generate potential trades.
• Strong signals are filtered by oversold and overbought boundaries.
• Inputs let traders choose between strong-only signals and all crossovers.
• The document defines backtest settings but reports no results to establish profitability.

Tags

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