WaveTrend Divergence Signals with ATR Risk Sizing for Bitcoin

Summary

This TradingView strategy is presented for Bitcoin’s 15-minute chart and centers on a WaveTrend oscillator, a volume-weighted average price reference, and divergence signals. WaveTrend is formed from smoothed calculations on the average price, with a short simple moving average as a signal line. The code flags bullish or bearish divergence using recent price extremes and oscillator and price movements, then plots those signals. VWAP and overbought or oversold levels are displayed as context; the described entry logic itself is based on the divergence conditions.

For long positions, the code sizes exposure from a stated fraction of strategy equity and the distance to an ATR-based stop, then doubles the calculated size. It places a stop below the signal bar’s low and closes the long on a bearish divergence; no short entry is implemented. The text also describes parameter sensitivity, indicator whipsaws, volatility, and limited timeframe coverage as caveats. Published settings identify BTC_USDT on Binance, but no backtest results are supplied, and the code’s risk controls do not establish profitability or cap losses during gaps.

Key ideas

• WaveTrend is calculated from smoothed average-price values, with a simple moving average serving as its signal line.
• Bullish and bearish divergence conditions compare recent price extremes with changes in the oscillator and price.
• The code opens longs on bullish divergence, sizes them from equity risk and stop distance, and doubles that size.
• A stop is placed using ATR below the signal bar’s low, while bearish divergence closes the long.
• VWAP and overbought or oversold levels are plotted as context, but the document gives no performance results.

Tags

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