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What is the use of Wave Indicators? How it Works?

  • July 2014
  • Posted By Ninoslav

Wave indicator is generally an indicator which is used to visualize the direction as well as strength of overall market given across multiple time frames. Wave indicators show the movements of the prices in a continuous form i.e. in waves. So that one can assume the direction in which price is moving. This also some impulse or, trends move as well as corrective moves.

Where trend occurs, it forms waves. As you are a trader you need to identify all these properly. Identification of trends worth trading is not so easy and many people feel frustrating. But you should not give up like other people. You should learn to identify the wave patterns in Wave indicators properly. Then you can identify the trend as well as the market pattern easily. These will help you to find better trading opportunities in the future.

What wave oscillator does?
Basically, oscillator shows a correlation pattern of the waves induced in wave indicator in a strong way. So it will ease difficulties in understanding wave patterns. It will work better if there are large enough sample of values i.e. price.

If you know your position in the pattern of waves, then you will be able to trade in the underlying market force direction. But it is not an easy process to understand Wave indicators. It will take a long time to understand all these. So, take your time and study this properly.

MACD settings can also be used to get a mirror image of the wave. To know more about MACD indicator read “Why is MACD indicator important to understand the stock markets?”


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