WaveTrend: the default came second of 30
30 WaveTrend settings backtested on USD/JPY across 2025 and 2024. All 30 were profitable on hourly bars in 2025, and the default placed second of them.
WaveTrend measures how far the bar midpoint has moved from its own average, divided by the typical size of that gap. Standardising the deviation gives two lines, and their crossings are the signal.
I tested two parameters across 30 combinations on USD/JPY through the whole of 2025, on three timeframes, then ran the same 30 on 2024.
All 30 were profitable on hourly bars in 2025, and all 30 were profitable on four-hour bars in 2024. On 15-minute bars, not one was profitable in both years.
By timeframe
| Timeframe | Profitable 2025 | 2025 median | Profitable 2024 | 2024 median | Both years | Trades a year |
|---|---|---|---|---|---|---|
| 15-minute | 1 / 30 | −1,101 pips | 0 / 30 | −1,293 pips | 0 / 30 | ~1,800 |
| 1-hour | 30 / 30 | +1,237 pips | 23 / 30 | +1,364 pips | 23 / 30 | ~420 |
| 4-hour | 29 / 30 | +659 pips | 30 / 30 | +1,568 pips | 29 / 30 | ~112 |
At 1,800 trades a year, all 30 lost money in 2024 on 15-minute bars. A 0.3 pip spread costs about 1,080 pips at that count, and nothing here earned past it.
Hourly and four-hour are the opposite story. Four-hour reached 29 of 30 profitable in both years — among the steadiest results of the nine indicators tested this way.
The default is enough
| 1-hour | 2025 | 2024 |
|---|---|---|
| Default 10/21 | 434 trades, 36.64% win, PF 1.283, +1,672.5 pips (2nd of 30) | +1,340.9 pips (16th) |
| Best of 2025, 20/15 | 374 trades, 36.90% win, PF 1.316, +1,772.8 pips (1st) | +1,106.0 pips (21st) |
| Best of 2024, 30/30 | +1,141.9 pips (20th) | +2,272.0 pips |
| Worst of 2025, 5/10 | +617.9 pips | −1,448.1 pips |
First and second are about 100 pips apart, and in 2024 the order flips with the default ahead. The gain from searching is inside the noise.
Row four matters too: the worst hourly setting of 2025 still made +617.9 pips. With all 30 positive, "worst" does not mean losing.
Rank correlation +0.393 — high for this series, and still enough for 2025's winner to place 21st in 2024.
Four-hour behaves the same way
| 4-hour | 2025 | 2024 |
|---|---|---|
| Default 10/21 | 117 trades, 40.17% win, PF 1.196, +631.4 pips (18th) | +1,471.3 pips (20th) |
| Best of 2025, 20/21 | 89 trades, 43.82% win, PF 1.552, +1,238.7 pips | +1,037.6 pips (27th) |
| Best of 2024, 5/10 | +616.3 pips (19th) | +2,445.2 pips |
| Worst of 2025, 30/45 | −83.6 pips | +1,289.6 pips |
The default sits mid-table both years and is positive in both. Rank correlation +0.164.
On both timeframes the shape is the same: any setting makes money, and the ordering means nothing — the same character OsMA showed on hourly bars.
The win rate is low
Across the 30 hourly settings in 2025, win rates ran 32.35% to 40.04% with a median of 35.8%. Win rate and net pips correlate at −0.123.
On 15-minute bars that correlation falls to −0.534 — higher win rates, worse results. At that trade count, whatever raises the win rate appears to raise the cost burden faster.
Adding WaveTrend to a chart
| Platform | How to add it |
|---|---|
| MT4 / MT5 | Not included. Download an .ex4 or .mq4 into MQL4/Indicators (MQL5/Indicators on MT5), restart |
| TradingView | In the indicator list as "WaveTrend" |
| Browser (Formiq) | In the indicator list, with channel and average periods adjustable |
How this was measured
| Item | Value |
|---|---|
| Pair | USD/JPY |
| Period | 2025-01-01 to 2025-12-31 (2024 run identically for comparison) |
| Timeframes | 15-minute / 1-hour / 4-hour |
| Bars tested | 6,226 hourly bars in 2025; 24,903 on 15-minute, 1,610 on 4-hour |
| Buy | wt1 crosses above wt2, filled at that bar's close |
| Sell | wt1 crosses below wt2 |
| Exit | The opposite crossover only — no stop, no target, no time exit |
| Costs | 0.3 pip spread, zero slippage, 0.1 lot |
| Combinations | 6 channel periods (5–30) × 5 average periods (10–45) = 30 |
| Method | Executed in Formiq's backtester; pips recomputed from each trade's fill prices |
What this test supports
- Hourly and four-hour both work. All 30 positive on hourly in 2025 and on four-hour in 2024; 23 and 29 of 30 across both years
- Not on 15-minute bars. All 30 lost in 2024; 1,800 trades a year cannot carry the spread
- The default 10/21 is enough. Second on hourly, 18th on four-hour, about 100 pips off the winner and ahead of it in 2024
- The ordering is unreliable but harmless here. Rank correlations +0.393 and +0.164, with the hourly worst still at +617.9 pips
- A win rate in the thirties is the correct shape, correlating −0.123 with profit, and −0.534 on 15-minute bars
The same method applied to OsMA, Accelerator Oscillator, Stoch RSI, STC, QQE, Aroon, RVI, Supertrend, Williams %R and MFI.
Limits of this test
- One pair, two years
- Both years may simply have suited hourly and four-hour WaveTrend. A clean sweep says as much about USD/JPY in this window as about the indicator
- WaveTrend implementations differ (the constants used to standardise the deviation, the smoothing type). These figures come from Formiq's
- Only the two-line crossover is tested; overbought and oversold bands such as ±60 are not
- Entries and exits both fill at bar closes
- The spread is modelled as a flat 0.3 pips; the 15-minute result depends heavily on that
- Four-hour settings trade 74 to 163 times a year
- Volatility varies by hour of the day
Questions people ask
- What are the best WaveTrend settings?
- On hourly bars in 2025 the best was 20/15 (374 trades, +1,772.8 pips) with the default 10/21 second at +1,672.5 — about 100 pips apart. In 2024 the order reverses, with the default 16th and 20/15 21st. Searching added almost nothing.
- Which timeframe suits WaveTrend?
- Hourly and four-hour. All 30 settings were profitable on hourly bars in 2025 with 23 profitable in both years, and 29 of 30 were profitable in both years on four-hour bars. On 15-minute bars, none were — that version trades about 1,800 times a year.
- What does WaveTrend measure?
- How far the bar midpoint sits from its own moving average, divided by the average size of that gap. Standardising the deviation produces two lines, and trades come from their crossings.
- What win rate does WaveTrend produce?
- A low one: 32.35% to 40.04% across the 30 hourly settings in 2025, median 35.8%. Win rate and net pips correlate at −0.123, so a higher win rate did not mean a better result — on 15-minute bars that correlation falls to −0.534.
- Is WaveTrend built into MetaTrader?
- No, neither MT4 nor MT5 includes it. You download an .ex4 or .mq4 into MQL4/Indicators (MQL5/Indicators on MT5) and restart. TradingView lists it as "WaveTrend". Formiq's charts include it with both parameters adjustable.
Formiq is a free browser-based FX terminal with replay practice and no-code backtesting. Open the chart or see what the free plan includes.