WaveTrend & Supertrend Combined

The WaveTrend & Supertrend Combined indicator combines two popular trend-following methodologies into a single visual dashboard to identify high-confluence trading opportunities.

Usage

The indicator displays three horizontal bands representing different components of the trend analysis. Users should monitor the color changes to determine market sentiment:

• Supertrend Band (Bottom): Indicates the current state of the Supertrend calculation. Green signifies a bullish trend, while Red signifies a bearish trend.
• WaveTrend Band (Middle): Reflects the relationship between the WaveTrend signal and its moving average. A Green band indicates a bullish crossover, and a Red band indicates a bearish crossover.
• Combined Band (Top): This is the primary signal line. It turns GREEN when both the Supertrend and WaveTrend are in bullish agreement, suggesting a potential BUY opportunity. It turns RED when both indicators are in bearish agreement, suggesting a potential SELL opportunity.

Details

This tool utilizes a logarithmic price source for the WaveTrend calculation and processes it through an Ehlers Exponential Moving Average (EMA) smoother for reduced noise. The Supertrend component uses a customizable ATR-based volatility calculation to define trend direction. By combining a momentum oscillator (WaveTrend) with a volatility-based trend follower (Supertrend), the script aims to filter out false signals that may occur when only one methodology is used.

Settings

Supertrend

• 1Hr Period: The lookback period used for the Supertrend calculation.
• 1Hr Multiplier: The ATR multiplier that determines the sensitivity of the Supertrend.
• Change ATR Calculation Method?: Toggles between a standard ATR and a Simple Moving Average of the True Range.

Wavetrend

• Channel Length: The lookback period for the initial price channel calculation.
• Average Length: The period used for the smoothing EMA of the price channel.
• Signal Smoothing: The smoothing factor applied via the Ehlers smoother.
• MA Period: The period for the Signal line's moving average crossover.
• Overbought/Oversold Levels: Define the threshold levels for momentum extremes.
• Histogram/Signals: Toggle visibility for secondary visual components.
• Source: The price data input used for the WaveTrend calculations (default is Close).

FAQ

How do I use the Combined line for entries?

The Combined line acts as a confluence filter. Traders often look for the top line to turn Green for long entries and Red for short entries, as this indicates both underlying strategies are aligned.

Can I set alerts for these signals?

Yes, the script includes built-in alert conditions for Combined Buy/Sell signals, WaveTrend crossovers, and Supertrend flips.

How do I access WaveTrend & Supertrend Combined?

You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.