WaveTrend V4

The **WaveTrend V4** indicator combines MACD and WaveTrend oscillators to identify trends and potential reversal points. Here's a simplified guide to using it:

---

### **Key Components**
1. **WaveTrend Lines**
- **Green Line (WT1):** Fast-moving oscillator.
- **Red Line (WT2):** Slow-moving signal line.
- **Overbought (-60)/Oversold (60):** Horizontal dashed lines marking extremes.

2. **MACD Lines**
- **Blue Line (MACD):** Standard MACD line.
- **Purple Line (Smoothed MACD):** Smoothed version of the MACD.
- **Orange Line (Signal):** MACD signal line.

3. **Background Colors**
- **Green:** Uptrend (buying pressure).
- **Red:** Downtrend (selling pressure).
- **Yellow:** Indecision/neutral market.

---

### **How to Use It**
1. **Trend Identification**
- **Buy Signal:** Green background + WT1 crosses **above** WT2 (especially if both are below -60).
- **Sell Signal:** Red background + WT1 crosses **below** WT2 (especially if both are above 60).
- **Indecision:** Yellow background – avoid taking positions until trend clarifies.

2. **Overbought/Oversold Zones**
- **Oversold (WT1 < -60):** Potential buying opportunity if WT1 starts rising.
- **Overbought (WT1 > 60):** Potential selling opportunity if WT1 starts falling.

3. **MACD Confirmation**
- Look for alignment between the **smoothed MACD** (purple) crossing the **signal line** (orange) and the WaveTrend trend color.

4. **Divergence**
- **Bullish Divergence:** Price makes lower lows, but WT1 forms higher lows.
- **Bearish Divergence:** Price makes higher highs, but WT1 forms lower highs.

---

### **Pro Tips**
- Combine with price action (support/resistance) for higher accuracy.
- Avoid trading in "yellow" zones (indecision).
- Use stop-losses to manage risk during false signals.

This indicator works best in **trending markets** – be cautious in sideways conditions!