Theory:
The Wave Period Oscillator (WPO) is inspired by Akram El Sherbini's insightful article, "Time Cycle Oscillators," which appeared in the IFTA journal back in 2018.
The WPO serves as a short-term oscillator, effectively measuring the buying and selling cycles within a specific timeframe. When the oscillator crosses above the zero line, it signals a bullish buying period, while a move below indicates a bearish selling phase.
Usage:
Trading TacticsOne of the primary strategies involves monitoring the centerline crossover. As depicted in Figure 11, a bullish centerline crossover happens when the WPO rises above the zero level, turning positive. Conversely, a bearish crossover occurs when it dips below zero, turning negative. When bulls take charge, a price rally typically ensues, boosting the average bullish period (T) and pushing the WPO above the centerline, thereby triggering a buy signal. However, when buyer momentum wanes, the price may stagnate, leading to a decrease in the average period. During such times, the WPO line may hover around the centerline, resulting in potential false signals or whipsaws. To mitigate these whipsaws around the centerline, consider the following trading tactics:
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