ZenAlgo - Waves

ZenAlgo - Waves is a powerful technical analysis indicator that combines multiple tools into a cohesive framework for identifying market trends, momentum shifts, and potential trading opportunities. By integrating WaveTrend, RSI+MFI, and custom Moving Averages (MA), this indicator offers traders visual insights into overbought/oversold conditions, trend strength, and divergence patterns. Unique features like state classifications and multi-timeframe trend tables provide a comprehensive view of the market.

Features
This indicator introduces several customizations and integrations that distinguish it from free alternatives:

• WaveTrend Oscillator (WT): Detects momentum shifts and overbought/oversold zones with customizable thresholds.
  
• RSI + MFI Fusion: A combined price-volume metric, displayed as a color-coded histogram, offering insights into market dynamics.
  
• Customizable Moving Average (MA): Includes various advanced MA types (e.g., EMA, HullMA, ZEMA) for flexible trend detection and dynamic coloring to reflect trend direction.
  
• Dynamic Zones: Overbought and oversold levels are highlighted with gradient intensity for easy identification of extreme conditions.
  
• Divergence Detection: Identifies both regular and hidden divergences for WaveTrend and RSI+MFI, marking potential reversal areas with visual labels.
  
• State Classification: Categorizes market conditions into predefined states such as "No Brain Buy" or "Fire (Sell)" based on Extra MA values.
  
• Multi-Timeframe Trend Table: Summarizes WaveTrend, RSI+MFI, and Extra MA data across multiple timeframes (1m to 1D), helping traders assess market behavior.
  
• Actionable Alerts: Configurable alerts for WaveTrend crossovers, Extra MA signals, and key conditions like "Hot Sell" and "Cold Buy."
  

Added Value: Why Is This Indicator Original?

ZenAlgo - Waves integrates freely available sub-indicators like WaveTrend and RSI with unique enhancements that save time and improve accuracy. Features such as divergence detection for both WaveTrend and RSI+MFI, state classifications based on Extra MA ranges, and multi-timeframe alignment simplify analysis while reducing noise. These synergies and visualizations create actionable insights unavailable in standalone free indicators.


Reason for Combining Multiple Sub-Indicators

Standalone indicators often analyze a single aspect of market conditions (e.g., momentum or volume). ZenAlgo - Waves bridges these gaps by integrating:

• WaveTrend: Detects momentum changes and extreme price levels.
  
• RSI + MFI: Validates WaveTrend signals by incorporating price-volume relationships.
  
• Custom MA: Provides trend context, filtering out countertrend signals.
  

The synergy between these components reduces false signals by validating insights from multiple perspectives, improving confidence in trading decisions.


Synergy of Combined Indicators

1. WaveTrend and RSI + MFI: WaveTrend identifies overbought/oversold conditions, while RSI+MFI confirms momentum shifts based on price-volume dynamics. This combined approach minimizes noise and enhances signal reliability.
   
2. WaveTrend and MA: The trend direction of the MA refines WaveTrend signals, ensuring trades align with the broader market trend.
   
3. Divergence and Dynamic Zones: Divergence signals are more actionable when visualized alongside gradient-filled overbought/oversold zones.
   

How It Works
1. WaveTrend Oscillator

• Calculates WT1 (momentum line) and WT2 (signal line) using smoothed averages.
  
• Highlights overbought/oversold thresholds with customizable levels (OBL, OSL).
  

2. RSI + MFI Fusion

• Combines Relative Strength Index and Money Flow Index values into a smoothed metric.
  
• Displays as a color-coded histogram, indicating increasing or decreasing trends.
  

3. Custom Moving Average (MA)

• Supports multiple MA types (e.g., TEMA, HullMA) for trend analysis.
  
• Changes color dynamically based on rising or falling trends.
  

4. Dynamic Zones

• Highlights areas above OBL and below OSL with gradient intensity, indicating overbought/oversold conditions.
  

5. Divergence Detection

• Identifies regular and hidden divergences for WaveTrend and RSI+MFI.
  
• Marks divergence points with "R" (regular) and "H" (hidden) labels.
  

6. State Classification

• Categorizes market conditions into states (e.g., "No Brain Buy") based on Extra MA values.
  
• Visualizes state transitions with color-coded highlights.
  

7. Multi-Timeframe Trend Table

• Displays trends for WT, RSI+MFI, and Extra MA across six timeframes.
  
• Helps traders confirm alignment across short- and long-term trends.
  

8. Alerts

• Configurable alerts for divergence signals, WaveTrend crossovers, and Extra MA conditions like "Hot Sell" or "Cold Buy."
  

Usage Examples

1. Overbought Reversal: Sell when WT1 crosses below WT2 in the overbought zone (OBL), confirmed by a bearish RSI+MFI histogram.
   
2. Bullish Divergence: Enter a buy position when a bullish divergence appears between RSI+MFI and price in the oversold zone (OSL).
   
3. Trend Confirmation: Align WaveTrend buy signals with a rising Extra MA for stronger trend confirmation.
   
4. State Transitions: Monitor state changes like "No Brain Buy" or "Fire (Sell)" for entry or exit signals.
   
5. Multi-Timeframe Validation: Use the table to confirm short-term signals against long-term trends, avoiding false entries.
   

Settings

• WaveTrend Parameters: Channel Length, MA Length, Overbought/Oversold Levels.
  
• RSI+MFI Parameters: RSI+MFI Period, RSI+MFI Multiplier.
  
• MA Configuration: Type (e.g., EMA, HullMA), length, and trend reaction sensitivity.
  
• Visualization Options: Show/hide dynamic zones, divergences, table, and histogram.
  
• Alerts: Configure alerts for crossovers, divergences, and state changes.
  

Important Notes

• This indicator is a technical analysis tool and does not guarantee trading success.
  
• Known Limitations: May perform poorly in low-volume or highly volatile markets.
  
• Best Practices: Use ZenAlgo - Waves in conjunction with other indicators and fundamental analysis for a comprehensive strategy.