WaveTrend¶
Indicators · Momentum
LazyBear's dual-line momentum oscillator on hlc3.
WaveTrend (popularised by LazyBear) is a dual-line momentum oscillator prized for how cleanly it marks turns. It smooths price into two lines — a fast WaveTrend line and its signal — that cross at momentum reversals, and it tends to call overbought/oversold extremes with notably good timing. It's become a staple in crypto and intraday trading because its crossovers at the extremes line up with reversals more reliably than most oscillators.
How it works¶
Working from the bar's typical price (high + low + close) / 3, the block builds a normalisation "channel" with an EMA over the Channel length (10), smooths that into the primary WT1 line over the Average length (21), and derives the WT2 signal line as an SMA of WT1 over the Signal length (4). The two lines oscillate in a sub-pane; their crossover is the signal, and crossovers occurring at the stretched extremes (well above or below zero) are the high-quality reversal cues.
When to use it¶
Use WaveTrend for reversal timing, especially at extremes. The strongest setup is a WT1/WT2 cross while the oscillator is stretched — a cross down from a high extreme for shorts, up from a low extreme for longs. It's well suited to mean-reversion and to catching swing turns, and it's a favourite on crypto and lower timeframes. Mid-range crossovers (near zero) are lower quality and best ignored; pair it with structure or a trend filter for confluence.
Example¶
A stretched-cross reversal: wire bars into WaveTrend and take a WT1-crosses-WT2-up event via a Crosses Above while the oscillator is at a low extreme, into a Buy Signal — ideally confirmed at a Supply/Demand Zone through an And gate. Backtest in the Tester.
Tips & gotchas¶
- Crosses at the extremes are the gold — mid-range crosses near zero are noise.
- Strong on crypto and lower timeframes — where it earned its following.
- Pair with structure (Supply/Demand Zones, a level) for confluence.
- It's a reversal timer — combine with a trend filter so you're not fading a freight train.
Related blocks¶
Inputs¶
| Socket | Type | What to wire in |
|---|---|---|
| Bars | bars |
OHLC bars (high/low/close required) |
Outputs¶
| Output | Type | Plots as | Description |
|---|---|---|---|
| WT1 | series |
Line · sub-pane | Primary fast line |
| WT2 | series |
Line · sub-pane | Signal line (SMA of WT1) |
Parameters¶
| Parameter | Type | Default | What it does |
|---|---|---|---|
| Channel length | number · 2–200 | 10 |
EMA window for the normalisation channel |
| Average length | number · 2–200 | 21 |
EMA window for the primary line WT1 |
| Signal length | number · 2–100 | 4 |
SMA window for the signal line WT2 |
| WT1 color | colour | #26a69a |
|
| WT2 color | colour | #ef5350 |
Reference auto-generated from the block catalog · category Indicators.