Wavetrend (for trend following)

In this example we will take a look at the Arithmetic Candlestick and the Wavetrend Momentum to find trend following setups in a strong trend.

The setup scenario

The following criteria are being used in the shown examples

• Arithmetic candlesticks trend tracker is showing a positive/negative trend

• Wavetrend stability line is aligned with the positive/negative trend of the Arithmetic trend tracker

• The Arithmetic candlesticks turn green/red and a positive/negative wave forms on the wavetrend momentum

• For entry the wave opposite to the current trend starts to decrease

• Exits are when either a strong wave in the direction of the trend starts to decrease or when the TP of 2:1 risk reward is completed

• A stop loss can be placed on a shortterm low or adjusted manually depending on risk management

• (Bonus) Use a higher timeframe approach to defining a strong trend. If the trend of the Arithmetic and wavetrend are followed blindly this does per definition not indicate a strong trend, especially on the lower timeframes higher timeframe trend analysis should be taken into account.

Settings

All the indicator settings are default settings.

Disclaimer: This content is not financial advise and is for educational and entertainment purposes only.