📚 Documentation
WaveNodes Sigma
v5.25All-in-one professional tool to analyze price action with state-of-the-art analytics
Getting Started
📈 Your Learning Journey
Follow this structured path to master WaveNodes Sigma:
- 1Foundation: Understand core concepts (15 min)
- 2Installation: Get Sigma running on TradingView (5 min)
- 3Features: Explore each module (30 min)
- 4Practice: Apply in real trading scenarios (ongoing)
🎯 What You'll Learn
By the end of this guide, you'll be able to:
- Identify current market trends at a glance
- Read the Analytics Dashboard for actionable insights
- Spot power candles showing institutional decisions
- Trade demand and supply zones effectively
- Use pair trading analysis for better positioning
- Project target zones (L1, L2, EXT) for exit planning
- Avoid trap scenarios and manage risk
Step 1: Accept License Agreement
Before using WaveNodes Sigma, you must accept the comprehensive license agreement. This includes terms of service, risk disclosure, and disclaimer available at wavenodes.com.
// "I have read and accept License Agreement, T&C, Risk Disclosure, and Disclaimer"
Step 2: Install on TradingView
- 1Log in to your TradingView account
- 2Open any chart you'd like to analyze
- 3Click on "Indicators" in the top toolbar
- 4Navigate to "Invite-only Scripts"
- 5Select "WaveNodes Sigma" from the list
- 6Configure settings according to your trading style
💡 Pro Tip
Start with default settings and gradually adjust based on your experience.
Sigma is built using Pine Script v5, ensuring compatibility with all TradingView charts and real-time data feeds.
Overview
WaveNodes Sigma is an all-in-one professional trading tool designed to analyze price action with state-of-the-art analytics. It provides traders with comprehensive market intelligence directly on their TradingView charts, eliminating the need for multiple indicators and complex analysis.
Market Trend Indicator
Visual trend indicator as chart background - instantly know market direction
Analytics Dashboard
All critical intel on screen - no need to analyze different chart aspects
Power Candles
Identify where big players made decisions to continue or reverse trends
Demand & Supply Zones
Critical support and resistance levels - breakouts lead to bigger rallies
Pair Trading
Analyze pairs to make right positioning decisions - boon for pair traders
Target Zones
L1, L2, and EXT zones for options traders - hedge and exit points
⚠️ Important Note
WaveNodes Sigma is a professional tool. Always use proper risk management and never risk more than you can afford to lose. Past performance does not guarantee future results. This indicator is for educational and informational purposes only.
Key Features
Market Trend Indicator
The Market Trend Indicator provides instant visual confirmation of the current market trend by coloring the chart background. This feature helps traders quickly assess market direction without needing to analyze multiple indicators.
🟢 Bullish Trend
Blue background indicates upward momentum. Look for buying opportunities and consider long positions.
🔴 Bearish Trend
Red background indicates downward pressure. Look for selling opportunities or consider short positions.
💡 Professional Trading Insight
The trend indicator is powered by WaveNodes' proprietary trend engine that adapts to changing market conditions. Here's how to use it effectively:
- Align your trades with the trend - "The trend is your friend"
- Use trend changes as early warning signals for potential reversals
- Combine with other Sigma features for higher probability setups
- Be cautious when trend changes - wait for confirmation from other modules
State-of-Art Analytics Dashboard
The Analytics Dashboard provides all required intelligence on screen without the need for analyzing different aspects of the chart. It displays real-time market state, expected price behavior, and critical trading information.
Dashboard Components:
Expected: Range
Market is likely to remain within the displayed price range when not in a trending but decisive state. Ideal for range trading strategies.
Expected: Trend
Market is showing directional momentum. Consider trend-following strategies and look for continuation setups.
Expected: Indecisive Moves
Upcoming indecisive and abrupt/random moves expected. Be cautious and reduce position sizes. This is a warning to handle uncertainty without worrying.
💡 Professional Trading Insight
The Analytics Dashboard is your command center. Here's how to interpret it like a pro:
- Range + Demand/Supply Zones: Perfect for mean reversion trades. Buy near demand, sell near supply.
- Trend + Trap Alert: Be extra careful. Traps often occur during trend exhaustion phases.
- Indecisive + Power Pair: Use pair trading signals to hedge positions and reduce directional risk.
- Zone Size: Larger zones indicate stronger institutional interest - treat them with more respect.
Power Candles
Power Candles are special candles that indicate where big players (institutional traders, whales, sharks) made significant decisions to continue the trend or go for reversal. These candles provide crucial insights into market sentiment and potential future direction.
🟢 Bullish Power Candle (Aqua)
Indicates strong buying pressure from institutional players.
- • Look for long entries or add to existing longs
- • Often marks the start of strong uptrends
- • Can signal continuation after pullbacks
- • High probability of follow-through
🔴 Bearish Power Candle (Orange)
Indicates strong selling pressure from institutional players.
- • Look for short entries or exit long positions
- • Often marks the start of strong downtrends
- • Can signal continuation after rallies
- • High probability of downward continuation
🔍 How Power Candles Work
Power Candles are identified by a proprietary momentum framework designed to highlight high-conviction market participation:
- Sensitivity adapts based on your selected Trade Aggression profile
- Detects momentum crossovers and trend changes
- Filters out noise to focus on significant moves
- Marked with optional flag (⚑) when enabled in settings
💡 Professional Trading Insight
Power Candles are your institutional radar. Here's how professionals use them:
- Entry Triggers: Use Power Candles as entry confirmation. Enter in the direction of the Power Candle.
- Trend Confirmation: Multiple Power Candles in same direction confirm strong trend continuation.
- Reversal Warnings: Power Candle against the trend may signal potential reversal - be cautious.
- Stop Loss Placement: Place stops just beyond the opposite end of the Power Candle.
- Multi-Timeframe Analysis: Check Power Candles on higher timeframes for major signals, lower timeframes for precise entries.
Power Demand & Supply Zones
Demand and Supply zones are critical price levels where the market is likely to find support or face resistance. These zones represent areas where institutional traders have historically placed large orders, making them significant levels for price reaction.
🟢 Demand Zone (Green)
Area where buying pressure historically overcomes selling pressure - acts as support.
- • Look for buying opportunities when price approaches
- • Breakouts above often lead to strong rallies
- • Acts as support during bullish trends
- • Institutional buyers defend these levels
🟠 Supply Zone (Orange)
Area where selling pressure historically overcomes buying pressure - acts as resistance.
- • Look for selling opportunities when price approaches
- • Breakouts below often lead to strong declines
- • Acts as resistance during bearish trends
- • Institutional sellers defend these levels
⚡ Box Overlap & Balanced State
When Demand and Supply zones overlap, the market is in a balanced state (non-trending or range-bound). This is an important concept:
- Balanced State: Price between red and green boxes - range trading conditions
- Imbalanced State: Price breaks out below red or above green - trending conditions
- Transition: Moving from balanced to imbalanced often signals the start of new trends
🚨 Breakout Alerts
Sigma provides alerts for Demand and Supply zone breakouts:
- Demand Breakdown: Alert when price breaks below the Demand Zone
- Supply Breakout: Alert when price breaks above the Supply Zone
- Box Overlap Alert: Alert when Demand and Supply zones overlap
💡 Professional Trading Insight
Demand and Supply zones are the foundation of professional trading. Master these strategies:
- Zone Touch Reversal: Enter when price touches a zone and shows reversal signals (candlestick patterns, rejection wicks).
- Zone Breakout Trading: Enter on decisive breakouts with volume confirmation - look for Target Zones.
- Zone Re-tests: After breakout, watch for price to re-test the broken zone - often becomes opposite zone (support becomes resistance).
- Zone Freshness: Freshly created zones (after strong moves) are more powerful than old, re-tested zones.
- Zone Size Matters: Larger zones = stronger institutional interest = higher probability of reaction.
- Stop Loss Placement: Place stops just beyond the opposite end of the zone for tight risk management.
Trap Alerts
Trap Alerts notify you when there's a high probability of buyers or sellers getting trapped in reversal trades. This is a critical risk management feature that helps you avoid common pitfalls and protect your capital.
🚨 Buyer Trap
Warning that buyers may be trapped near resistance levels.
- • Price showing signs of reversal at highs
- • Momentum divergence detected
- • High probability of downside move
- • Consider exiting longs or reducing exposure
🚨 Sellers Trap
Warning that sellers may be trapped near support levels.
- • Price showing signs of reversal at lows
- • Momentum divergence detected
- • High probability of upside move
- • Consider covering shorts or going long
⚠️ How Trap Alerts Work
Trap Alerts are generated by a proprietary trap-detection model that identifies conditions where directional entries are vulnerable to reversals:
- Monitors momentum extremes and divergence patterns
- Detects when traders are likely entering at wrong levels
- Provides on-screen textual alerts when enabled
- Shows in Analytics Dashboard when active
💡 Professional Trading Insight
Trap Alerts are your safety net. Here's how to respond to them professionally:
- Immediate Action: When trap alert appears, reduce position size or hedge existing positions immediately.
- Avoid New Entries: Do not enter new trades in the direction that might get trapped.
- Consider Reversal: Trap alerts often precede reversals - look for opposite direction opportunities.
- Not Absolute: Trap alerts warn of risk, don't confirm direction - wait for additional confirmation.
- Combine with Zones: Trap alerts near demand/supply zones are especially powerful - institutional levels.
- Options Trading: For options writers, trap alerts signal potential to benefit from reversal - consider opposite side strategies.
Power Pair Trading
The Pair Trading module analyzes the relationship between your current selected instrument and one of your choice (by default, NIFTY and BANKNIFTY). This feature is a boon for pair traders, helping you make right positioning decisions by comparing relative strength.
📊 Base Instrument
The primary instrument you're analyzing (default: NIFTY).
- • Shows Buy/Sell recommendation
- • Color-coded for easy identification
- • Compares against compare instrument
- • Can be customized in settings
📊 Compare Instrument
The secondary instrument for comparison (default: BANKNIFTY).
- • Shows Buy/Sell recommendation
- • Color-coded based on relative strength
- • Complementary to base signal
- • Can be customized in settings
🔍 How Pair Trading Works
The Pair Trading module uses WaveNodes' relative-strength framework to compare two instruments and identify positioning bias:
- Evaluates how one instrument is behaving versus the other over a rolling comparison window
- Compares relative strength to determine Buy/Sell signals
- Automatically adjusts to timeframe (15-minute minimum for intraday)
- Not valid for futures instruments (marked accordingly)
💡 Professional Trading Insight
Pair Trading is essential for delta-neutral strategies and reducing directional risk. Here's how professionals use it:
- Delta-Neutral Strategies: Buy one instrument, sell the other based on pair signals - profit from spread.
- Hedging: Use pair signals to hedge positions and reduce directional exposure.
- Relative Strength: Trade the stronger instrument long, weaker instrument short.
- Arbitrage: Look for mispricings between correlated instruments.
- Custom Pairs: Customize to trade any pair - stock vs index, commodity pairs, etc.
- Confirmation: Use pair signals to confirm or contradict primary trade direction.
Target Zones (L1, L2, EXT)
Target Zones are projected price levels generated from WaveNodes' proprietary zone-expansion model. These zones are especially valuable for options traders, providing critical intel on where to hedge positions fully, where to exit, and likely target areas under current market conditions.
🎯 Target Zone Levels
L1 (Level 1)
First target zone. Primary profit-taking and risk-reduction level.
L2 (Level 2)
Second target zone. Strong continuation or reaction level.
EXT (Extended)
Extended target zone. Used for extreme extension and late-stage move management.
📈 Upside Targets
Projected when price breaks above Supply Zone.
- • L1: First resistance above supply
- • L2: Stronger resistance level
- • EXT: Maximum upside extension
- • Ideal for long exit planning
📉 Downside Targets
Projected when price breaks below Demand Zone.
- • L1: First support below demand
- • L2: Stronger support level
- • EXT: Maximum downside extension
- • Ideal for short exit planning
🔐 Breakout Reliability
Sigma provides reliability metrics for breakouts to aid in hedging and risk management:
- High Reliability: Indicates favorable structure for continuation after breakout.
- Medium Reliability: Indicates mixed conditions where continuation is possible but less certain.
- Reactive Breakout: Indicates elevated risk of failure, reversal, or trap-like behavior.
💡 Professional Trading Insight
Target Zones are essential for options traders and precise exit planning. Here's how to use them professionally:
- Options Writers: Use L1 as primary hedge level, L2 as full hedge. Target premium collection at these zones.
- Options Buyers: Plan exits at L1 for quick profits, hold partial for L2 if trend is strong.
- Position Sizing: Reduce position size as price approaches targets - lock in profits progressively.
- Trail Stops: Move stops to L1 after hitting L2, to L2 after hitting EXT.
- Reversal Signals: Watch for rejection at target zones - may signal trend reversal.
- Touched Status: Green checkmarks indicate zones have been tested - consider taking profits at touched zones.
- Reliability Matters: Adjust position size based on breakout reliability - smaller sizes for low reliability breakouts.
Trade Aggression Adjustment
The Trade Aggression setting allows you to adjust the indicator's sensitivity based on your trading style and risk appetite. This feature helps traders align the analysis with their personal approach to the market.
Highest
Quick, aggressive trades
Scalpers, day traders
Default
Balanced approach
Most traders
Moderate
Moderate aggression
Swing traders
Patient
Patient traders
Position traders
Lowest
Highly patient
Long-term investors
🔍 How Trade Aggression Works
The Trade Aggression setting controls how quickly Sigma responds to changing market behavior:
- Lower values (1-2): More sensitive, faster signals, higher signal frequency
- Higher values (3-5): Less sensitive, slower signals, smoother behavior
- Affects: Power Candle timing, trend responsiveness, and overall signal cadence
- Default: 2 (balanced) - works well for most trading styles
💡 Professional Trading Insight
Choose Trade Aggression based on your trading style and market conditions:
- Scalping (1-2): Use on 1-5 minute charts for quick entries. Combine with tight stops.
- Day Trading (2-3): Default setting works well. 5-15 minute charts ideal.
- Swing Trading (3-4): Higher values filter out noise. 15-minute to 4-hour charts.
- Position Trading (4-5): Maximum patience. Daily and weekly charts. Ride major trends.
- Volatile Markets: Increase aggression (lower value) to capture moves faster.
- Quiet Markets: Decrease aggression (higher value) to avoid false signals.
Settings
Customize WaveNodes Sigma to match your trading style and preferences. Access these settings from the indicator settings panel in TradingView.
Analytics Dashboard
Toggle the main analytics dashboard display and customize its appearance.
Adjust Trade Aggression
Adjust sensitivity based on your trading style (1=Quick, 5=Patient).
Display Traps Info on Chart
Show trap alerts directly on the chart as textual labels.
Display Textual Analysis on Chart
Show expected range/trend/indecision information directly on the chart.
Power Candles
Display Power Candles with custom colors. Show optional flag markers.
Power Demand & Supply Zones
Display demand and supply zones with customizable colors.
Trend-based Chart Background
Color the chart background based on market trend direction.
Show Power Pair
Display pair trading analysis in the dashboard.
Show Key Levels on Chart
Display L1, L2, and EXT target zones on the chart.
Textual Alert for Unreliable Breakout
Show reliability labels when breakouts have low reliability.
Trading Tips & Professional Insights
Maximize your trading success with these professional insights and strategies for using WaveNodes Sigma effectively.
Core Trading Principles
1. Trend is Your Friend
Always align your trades with the prevailing trend. The Market Trend Indicator provides instant confirmation. Counter-trend trades are for experienced traders only and require tight stops.
2. Trade Zones, Not Points
Demand and Supply are zones, not exact points. Give price room to breathe within the zone. Enter on zone touches, not exact prices.
3. Wait for Confirmation
Don't jump the gun. Wait for Power Candles, zone breakouts, or trap alerts to clear before entering. Patience is more profitable than FOMO.
4. Risk Management First
Always know your stop loss before entering. Place stops beyond zones. Never risk more than 1-2% of your account per trade.
Advanced Strategies
🎯 Zone Reversal Strategy
Perfect for range-bound markets when Analytics Dashboard shows "Expected: Range":
- Wait for price to approach Demand (long) or Supply (short) zone
- Look for rejection candles, Power Candles in opposite direction, or trap alerts
- Enter when price shows signs of reversal
- Place stop beyond the zone
- Target opposite zone or L1 level
⚡ Breakout Momentum Strategy
For trending markets when Analytics Dashboard shows "Expected: Trend":
- Wait for decisive breakout of Demand or Supply zone
- Check breakout reliability - only trade high/medium reliability
- Enter on pullback to broken zone or on Power Candle continuation
- Place stop beyond the broken zone
- Target L1, L2, or EXT zones progressively
🔄 Delta-Neutral Pair Trading
Reduce directional risk using pair trading signals:
- Check Power Pair recommendations in dashboard
- If Base says Buy and Compare says Sell - go long Base, short Compare
- Position sizes based on contract value ratio
- Profit from spread between the two instruments
- Exit when pair signals change or target reached
Options Trading Special Tips
📝 For Options Writers
- • Write options when price is near opposite target zone
- • Use Demand/Supply zones as support/resistance levels
- • Full hedge at L1/L2 zones to protect against adverse moves
- • Trap alerts signal potential to benefit from reversal strategies
- • Pair trading helps create delta-neutral positions
📈 For Options Buyers
- • Buy calls near Demand zone, puts near Supply zone
- • Enter on Power Candle confirmation for directional bias
- • Plan exits at L1 for quick profits, hold partial for L2
- • Avoid buying when trap alerts show potential reversal
- • Use breakout reliability to size positions appropriately
🎯 Expiry Day Strategies
- • Focus on Demand/Supply zones - premiums gravitate there
- • Use 1-minute timeframe with Trade Aggression 1-2
- • Target zones become more critical - premiums settle near them
- • Increased volatility - expect larger zone ranges
- • Trap alerts very important - rapid reversals common
Common Mistakes to Avoid
❌ Chasing Price
Don't enter after price has already moved far from a zone. Wait for pullbacks or fresh zones.
❌ Ignoring Trap Alerts
Trap alerts are there to protect you. Respect them - reduce exposure or hedge when they appear.
❌ Trading Low Reliability Breakouts
Reactive breakouts with low reliability often fail. Wait for confirmation or skip the trade.
❌ No Exit Plan
Always know your exit before entry. Use target zones (L1, L2, EXT) to plan exits progressively.
❌ Trading Against the Trend
Counter-trend trades are for experts. Use the Market Trend Indicator to stay aligned.
❌ Overtrading Indecisive Markets
When dashboard shows "Expected: Indecisive moves", reduce trading. Wait for clarity.
Timeframe Guidelines
⚡ Scalping (1-5 min)
- • Trade Aggression: 1-2
- • Focus on Power Candles
- • Quick entries/exits
- • Tight stops
- • High volatility preferred
📊 Day Trading (5-15 min)
- • Trade Aggression: 2
- • Balanced approach
- • Zone breakouts
- • Target zones important
- • Most versatile timeframe
📈 Swing Trading (15min-4hr)
- • Trade Aggression: 3-4
- • Patient entries
- • Zone reversals
- • Multiple targets
- • Lower noise
🎯 Position Trading (Daily+)
- • Trade Aggression: 4-5
- • Maximum patience
- • Major trend following
- • Wide stops
- • Long-term targets
Release Notes
Version 5.25
Current- Stable release with all core features fully operational
Version 5.24 - February 15, 2025
Trade Aggression Feature🆕 New Feature: Trade Aggression Adjustment
New option in Settings that allows users to adjust their trade aggression level, offering more flexibility in trading styles:
- 1: Quick, aggressive trades (Scalpers)
- 2: Default setting (balanced)
- 3: Moderate trade aggression
- 4: Patient traders
- 5: Highly patient trades, holding positions for longer durations
- Optimized calculation processes for improved performance
- Code corrections - removed warnings
Version 5.23 - January 2, 2025
Target Zones & Alerts🆕 Major Features Introduced
- • New target zones: L1 (Level 1), L2 (Level 2), and EXT (Extended Target)
- • Alert functionality: Added alerts for breakouts and box overlaps, ideal for new delta-neutral trades
- • Balanced State: Demand/supply zones now treated as a balanced state, with breakouts classified as imbalanced states
- • Reliability Metric: Introduced a reliability metric for breakouts to aid in hedging and risk management decisions
- • Performance: Optimized calculation processes for improved performance
- • Cleanup: Deprecated old target calculation systems and removed features of low relevance
Version 5.22 - April 7, 2024
Pair Trading Update- Updated pair trading module
- Minor fixes
Version 4.0.2A - February 1, 2024
Sensitivity Update- Added TG sensitivity to adjust target for extreme low volatile scenario
- Minor other fixes
Important Disclaimer
⚠️ Stock Market Investment Risks
This documentation and the WaveNodes Sigma indicator are for educational and informational purposes only.
🚫 No Financial Advice
WaveNodes Sigma does not provide investment advice, financial advice, trading advice, or any other type of advice. The information contained herein is not intended to be and does not constitute financial advice, investment advice, trading advice or any other type of advice.
📊 Past Performance
Past performance of any trading strategy or indicator does not guarantee future results. Trading involves substantial risk of loss and is not suitable for all investors.
🇮🇳 Market Regulations
This indicator is designed for use across global markets through TradingView. Users should ensure compliance with local regulatory requirements, SEBI regulations, individual broker policies, and applicable laws.
⚖️ User Responsibility
By using WaveNodes Sigma, you acknowledge and agree that:
- • You are solely responsible for your investment decisions
- • You understand the risks involved in trading
- • You will not hold WaveNodes or its creators liable for any losses
- • You have adequate knowledge and experience in trading
- • You will seek professional advice when needed
🎯 Developing Your Own Strategy
The best approach is to develop your own trading strategy based on thorough analysis, depending on your preferred trading style and risk tolerance.
WaveNodes Sigma provides analytical tools and insights, but successful trading requires personal research, back-testing strategies across different market conditions, defining clear risk parameters, aligning with your preferred timeframe, continuous learning and refinement, and combining technical analysis with fundamental factors.
Remember: No single strategy works for all market conditions or all traders. What works for one person may not work for another.
🔒 Risk Warning
Trading and investing in financial markets involves significant risk of loss. Never invest money you cannot afford to lose. Always do your own research and due diligence.
Last updated: Dec 12, 2025
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