TrendWave is an indicator that combines the functions of a trend tool and an oscillator. Its algorithm is based on two Moving Averages, whose meeting at the key levels delivers a signal to buy or sell (the algorithm itself is a bit more complex).
TrendWave can be used alone but is more efficient, as all oscillators work, in combination with other indicators. From this review, you will learn general information about the indicator settings and parameters, its work principle, you will also get familiar with its application in forex trade, and with the example of the real strategies on the basis of TrendWave, where all the features, advantage and disadvantages of the indicator applied to short term trading are clear.
Just about 10 years ago, you could find this indicator only on paid resources. At that time, it cost about $100 to download it, but now it is free. Although some “authors” still try to sell modified versions of TrendWave under different names. In this article, in the part devoted to trading strategies in the forex market, you can download the indicator and its templates via a link absolutely free of charge.
The TrendWave indicator is called a trend oscillator, and it is interesting combination of two types of technical tools. It can identify the beginning and the end of a new wave trend movement and, as an oscillator, it identifies the overbought and oversold zones.
The indicator is based on a Simple Moving Average and an Exponential Moving Average with critical price levels. When the MAs meet at the overbought or oversold zones limited by strong price levels, based on technical analysis, there is a signal that is indicated as a dot in the chart.
The general algorithm of the chart formation is more complicated, and it makes no sense to study it in detail. After all, if know the programming language, you can study it on your own if you want.
Most strategies are based on the indicator reversal pattern, when its both lines meet higher or lower a particular level (depending on the assumed direction of the position you are going to open), there appears a dot that is the signal.
A few points that you should pay attention to: