INTELLIGENT WAVE CALCULATOR
IWC shows 2 lines and the cloud on the Candlestick chart.
The purpose of these 2 lines are explained below:
The red coloured line is also referred to as the stop line:
This line serves the purpose of identifying when the trend has actually begun and when the wave is about to end. The wave is considered to be in a bullish trend or recovery phase when the price is above the redline. In the same manner, a wave is considered to be in a bearish trend or connection phase, when it is below the redline or correction phase.
Blue coloured line, also referred to as target/retracement cloud mean point:
This line turns blue whenever price action suggests strength towards the long side and turns purple when the price section is weak and suggests short side preference. This information can also be validated with the help of the cloud colour. If the cloud colour is yellow then it shows strength in price action and the blue colour cloud shows weakness in price action.
The cloud represents the expected or possible retracement or correction range for the current wave. Usually, the blue coloured line is the mean of this cloud and is expected to be the high probability point for retracement or correction of the wave.
If the cloud is broken, that is candle closing outside the cloud, it can result in very strong price action. Thus, cloud breakouts are usually seen as a strong sign for good trade opportunity build-up.
AVA – ADVANCED VOLUME ANALYSIS
AVA indicator checks for accumulation and distribution by the investors and highlights the levels as below:
Red levels in AVA parallel lines – Distribution is ON
What to do? Either minimize the investment or book profit.
If the price is above Red levels, it is highly likely to be a trap or manipulated move, even the best moves at times can be a trap.
Blue levels in AVA parallel lines – Accumulation is ON
What to do? Either initiate investment or increase the exposure as per your risk appetite
If the price is below Blue levels, it is highly likely to be a trap or manipulated move, even the best moves at times can be a trap.
Last Hope Point (SHORT LENGTH RED DOTTED LINE):
This is the price point below algo’s of big traders are expected to shed investments. Thus it is also the point below which a trader can witness a sharp fall in the price. Below LHP, it is strongly recommended not to hold any buy-side position and wait for accumulation to begin again or let the price move above this level.
Target Price Point (SHORT LENGTH BLUE DOTTED LINE):
This is the price level that is expected to be achieved after accumulation. The breakout above this line is considered to be a strong sign of another bullish wave to form.
Wavenode PTL Module is the Profit Takeaway Level that uses the concepts of price action to forecast the possible future price level. PTL Module is used in sync with Wavenodes IWC.
Usage: PTL is the eventual target for IWC moves and breakout. PTL shows the expected price level as and when applicable. When PTL is not displaying, it means the market is likely to move against the forecasted price temporarily and the position must be hedged in such a case.
Breakout out above the PTL suggests further trend build up. Usually, the position is kept low above the PTL level.
Timeframe: PTL can be used on any timeframe. At times, the PTL can be close on a higher timeframe and farther on the lower timeframe. Both remain valid respectively.
Long PTL, Blue coloured
Short PTL, Red coloured
The PTL dashboard shows collective information that includes PTL info, current mode, phase*, and immediate bias of price action. Bias is recommended to be used on higher timeframes. On lower timeframes, it can be aggressive. The new version of PTL Dashboard has information on conditions for options buying (hedged trading) that helps option buyers to get alerted when returns are expected to be poor from options buying and/or hedged trading (long strategy)
*Note that phase sensitivity settings work independently in WaveNodes PTL Module and WaveNodes Volatility Meter but with the same logic. You will have to set/update sensitivity
WaveNodes Volatility Meter (Bonus)
WaveNodes Volatility Meter is the modified version of SBER PEC for Pro Max Edition.
It presents the following 3 pieces of information:
1. Volatility (presented as a histogram or line if minimal interface is selected) – Higher the bar or value, higher the volatility
2. PEC line, alsoe called Ref line – Critical reference level to check breakout in volatility and to check long term volatility
3. Phase of Price Action (colour of histogram bars or bottom bar if minimal interface is selected):
a) Blue colour – Bullish or Recovery Phase
b) Red colour – Bearish or Correction Phase
The tool also has the option to hide PEC line and to turn on/off the day range (High – Low of the day) and candle range (High – Low of the candle) for studying the price behaviour.
For phases, sensitivity can be adjusted from settings. Default value is 50. Do not change this value if you are not sure.
Rising or declining volatility and ref line helps options traders, as well as traders of other instruments, make timed decisions.