WaveTrend oscillator popular with futures traders

February 15th, 2024

The WaveTrend oscillator is a commonly used indicator among day traders of all stripes. This technical analysis tool identifies overbought and oversold conditions in the market and then generates trading signals.

This oscillator (or indicator) calculates two lines equal to the exponential moving averages (EMAs) and how they relate to the asset’s price. The initial line measures the distance between the price of the asset and its EMA, with the second line smoothing the first line during a specific timeframe. The theory here is that as the gap between price and EMA widens, the price is trending and could become overbought or oversold, depending on the direction of the trend.

WaveTrend oscillator

It’s recommended that traders use multiple indicators for the most accurate data analysis. The WaveTrend oscillator is considered a functional indicator as it shows which direction the trend is going, in addition to displaying a buy-sell signal for the trader. It pairs nicely with other commonly used indicators like MACD, RSI, and WMA.

Applications for oscillator trading

The NinjaTrader Ecosystem has several third-party providers offering oscillators and other indicators for futures traders, many of which are either free or available to test through a free trial. Some examples are:

  • Heiken-Ashi & RSI Blend: Reversal Oscillator with HA Candles by ninZa.co is a modern oscillator that combines the power of two famous trading tools: the Heikin-Ashi candle and the RSI indicator. This unprecedented combination has resulted in a modern indicator for NinjaTrader 8.
  • Precision Index Oscillator by Precision Trading Systems provides trade timing signals and is a consensus indicator with powerful variances from industry standard oscillators. When viewing it in tandem with other indicators, the differences are clear.
  • Zerolag Oscillator by LizardTrader is a MACD-type momentum oscillator based on two zero-lagging moving averages and designed for location momentum and pullback entries. Momentum entries are found shortly after a trend change, whereas retracement entries focus on the middle chunk of a larger trend.

To learn more about the WaveTrend oscillator and for full access to a growing library of other indicators plus market analyzer and SuperDOM add-ons and more, visit the NinjaTrader Ecosystem’s trading apps and services section.

How to Add 3rd Party App to NinjaTrader

To import your 3rd party app or add-on to NinjaTrader, simply follow these 3 steps:

  1. Download the app or add-on file to your desktop
  2. From the NinjaTrader Control Center window, select the menu Tools > Import > NinjaScript Add-On…
  3. Select the downloaded file from your desktop

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