WaveTrend
A momentum oscillator built from a smoothed price-channel calculation, designed to flag overbought/oversold zones and momentum shifts earlier than RSI or Stochastics.
What the numbers mean
Ten is the channel period measuring how far price sits from its own average, and 21 is the smoothing applied to that reading. The pair determines how early the oscillator turns; shorter settings produce many more signals.
- 10 — the channel period measuring distance from the average
- 21 — the smoothing applied to that reading
- ±60 — the conventional overbought and oversold bands
- ±53 — a tighter pair used on some platforms
How it is used
Read as an overbought/oversold oscillator with bands typically at ±60: traders watch for the line to reach a band and then hook back, treating that hook as the momentum shift.
- Reaching a band and hooking back → the momentum shift traders act on
- Crossings inside the bands → generally ignored
- Divergence against price → read as with any oscillator
How it relates to everything else
WaveTrend is a smoothed channel-index oscillator, closest in behaviour to CCI with extra smoothing, and it aims to turn earlier than RSI or stochastics. It has no standard definition across platforms, so readings differ between charting packages.
- Closest relative is CCI, with heavier smoothing
- Turns earlier than RSI; confirm with something slower
- Implementation varies by platform — do not compare readings across tools
What to watch for
It is a derived, heavily smoothed construction with no standard definition across platforms, so readings differ between charting packages and are hard to compare.