The Wave PM (Whistler Active Volatility Energy – Price Mass) indicator is an oscillator described in Mark Whistler's book, Volatility Illuminated.
The Wave PM is specifically designed to help read volatility cycles. When we visualize volatility cycles as a chart, we can get a clear view of the market volatility phases in multiple time frames. This indicator forms an arithmetic mean over 30 observed periods. Traders can thus get a better insight into "potential" volatility from up to pent-up energy, the different zones give strong help to predict future price developments.
Possible interpretation patterns:
You are at the end of a long uptrend and you want to know if the price is going to go down, if the indicator shows red and the value is above 25, it is likely to do so.
You're in a downtrend and there's a bit of a recovery phase, so you might be wondering if it's going to continue when the indicator shows green. It would go further with yellow, but with green it can be assumed that it is going down rapidly.
Special thanks to sourcey who programmed the 3D Wave-PM. us.tradingview.com/script/qT7frw7Q-3D-Wave-PM/ This variant of sourcey looks very nice, but was too confusing for me. In order to get a strong overview, forming an arithmetic mean is very useful. I hope you and the Mods like my version
Any reasoning for the 20/20 settings? I find 20/10 work much better
chervolino
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@drdgvhbh, The settings for a security, such as the 20/10 settings you mentioned, depend on the specific security and the market conditions. It is generally recommended to test different settings and see what works best for a particular security. If you have found that the 20/10 settings work better, then you may want to use those settings for those securities. It's always a good idea to do your own research and experimentation to determine the best settings for your investment strategy. I am currently working on a new prediction indicator and I appreciate your question. Is there anything else you would like to know? best regards Chervolino