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    WaveTrend (WT)
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      WaveTrend (WT)

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        Article summary

        WaveTrend (WT) is an oscillator that follows the price swings and indicates when the market conditions are overbought/oversold. The WT plots two waves with highs (appear as a line) and lows (appear as dots) oscillating below/above the zero level. The oscillator also provides overbought/oversold levels (-60 and +60) and additional signal levels (-50 and +50) that appear as dots. When one of the oscillator's wave is above the overbought level and crosses down the signal level, it is considered a sell signal. Similarly, when one of the oscillator's wave is below the oversold level and crosses above the signal level, it is considered a buy signal. Additionally, WT plots the Wave Difference plot that shows the relationship between the high and low prices over specified period.

        WT = (10 * EMA((High + Low + 2Close)/4) - 21 * EMA((High + Low + 2Close)/4)) / sqrt(2 * 30 * Var((High + Low + 2*Close)/4))

        where:
        EMA – Exponential Moving Average

        Relative Volatility IndexWaveTrend

        INPUTS

        InputDescription
        ChannelLengthThe number of bars used to calculate both WaveTrend1 and WaveTrend2 plots
        AverageLengthThe number of bars used to calculate EMA that is applied to the WaveTrend1 and WaveTrend2 plots
        OverBoughtLevel1The price to fix the overbought level at
        OverBoughtLevel2The price to fix the signal line for the overbought level
        OverSoldLevel1The price to fix the oversold level at
        OverSoldLevel2The price to fix the signal line for the oversold level

        PLOTS

        The plot renders the data you are working with on the chart. You can show/hide a plot by clicking the corresponding item in the settings. Every plot has a set of basic settings that you can change: color, weight, and type.

        PlotDescription
        ZeroThe zero level
        OverBought Level1The overbought level
        OverBoughtLevel2The signal level for the overbought level
        OverSoldLevel1The oversold level
        OverSoldLevel2The signal level for the oversold level
        WaveTrend1The plot going through the high prices
        WaveTrend2The plot indicating the low prices
        WaveDifferenceThe plot that visualizes the difference between WaveTrend1 and WaveTrend2
        Color

        Click the color rectangle under the plot's name to open the palette. Use the slider at the bottom to set the opacity of the color.

        Palette

        To create a custom color:

        1. Clickto open the color picker
        2. By using the slider at the bottom, adjust the main color
        3. Then, set a shade for the main color on the palette

        The custom-created colors are added to your palette. To remove a custom color, drag it out of the palette.

        Weight
        Change the value (in px) to adjust the thickness of the plot.
        Type
        The following plot types are available:
        • Linear. The plot is displayed as a line.
        • Column. The plot is displayed as a histogram.
        • Difference. The plot is displayed as a line which represents the difference between High and Low prices of the bar.
        • Points. The plot is displayed as points.
        • Text above candle. The plot is displayed as the price labels above candles on the chart.
        • Text below candle. The plot is displayed as the price labels below candles on the chart.
        • Triangle above candle. The plot is displayed as triangles above candles on the chart.
        • Color candle. The candles on candle-type charts are highlighted with specified colors.

        OVERLAYING

        Check Overlaying to display the indicator on the chart. Otherwise, the indicator is shown in a study pane down below.

        Note: To reset the settings, click Restore to Default next to the SETTINGS: INDICATOR'S TITLE
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