What Is This Indicator?

Radio Wave Cycle (RWC) – AlgoFuego is a unique market timing indicator built on the principle that price is the effect of time — not the cause. Instead of reacting to price levels, momentum, or trend crossovers, RWC models market movement as a physical radio wave: overlapping sine cycles of varying wavelengths that combine into a single composite wave representing the market's dominant rhythm.

The indicator converts time into mathematical wave structures, identifies rising and falling cycle phases, generates Long and Short signals from those phases, and includes a fully integrated backtesting engine for evaluating strategy performance directly on the chart.

“The market behaves much like a physical wave — characterized by frequencies, overlaps, reversals, and sub-cycles. RWC delivers a scientific, signal-driven method for accurately detecting the market's timing tones.” — AlgoFuego

The Core Concept: Market as a Radio Wave

The RWC model draws on a well-established principle from physics: complex signals can be decomposed into — or reconstructed from — multiple overlapping sine waves of different frequencies and amplitudes. Applied to markets, this means price movement can be approximated by summing several time-based cycles, each computed from the same anchor date but with progressively adjusted wavelengths.

The result is a composite wave that reflects the cumulative rhythm of all computed cycle layers — a simplified but mathematically grounded model of the market's timing behavior. When the composite wave rises, conditions favor Long exposure; when it falls, Short conditions are indicated.

This approach is conceptually aligned with amplitude modulation theory in signal processing, where a carrier wave is modulated by an information signal to produce a combined output:

Wikipedia: Amplitude Modulation

Radio Wave Cycle — Wave Simulation on Chart

How It Works: Core Mechanics

The RWC engine operates through four sequential stages that transform a start date and wavelength into actionable trade signals:

1. Cycle Generation from Start Date

The engine begins with a user-defined Start Date — the anchor from which all cycle timing is measured. Each cycle layer is computed by mapping elapsed time (in bars) since that date against the configured wavelength using a sine function. The formula for each cycle is:

Cycle(n) = sin( 2π × elapsed_bars / wavelength(n) )

Where wavelength(n) = Base Wave Length + (n × Step) for each of the N cycle layers. This produces a family of sine waves with progressively offset frequencies.

2. Composite Wave Aggregation

All computed cycle layers are summed to form the composite wave — a single unified signal that represents the aggregated rhythm of all cycle layers. This composite wave is the primary signal driver for rising and falling phase detection.

Composite Wave = Σ Cycle(1) + Cycle(2) + … + Cycle(N)

Radio Wave Cycle — Path Number and Digital Root Method

3. Rising and Falling Phase Detection

The indicator measures whether the composite wave is currently in a positive (rising) or negative (falling) state on each bar. This phase identification is the basis for Long and Short signal generation:

  • Rising Phase → Composite wave is positive / upward → Long signal zone
  • Falling Phase → Composite wave is negative / downward → Short signal zone

The individual cycle layers generated before aggregation are also rendered separately, revealing hidden intra-wave patterns — subtle sub-cycle structures that are invisible on standard price charts but can indicate secondary timing inflection points within the dominant rhythm.

4. The Path Number

Each configured wavelength produces a Path Number — a simplified reference value derived by applying the digital root method: repeatedly summing the digits of the wavelength until a single digit remains. This acts as a harmonic fingerprint for cycle alignment:

  • 194 → 1 + 9 + 4 = 14 → 1 + 4 = 5
  • 212 → 2 + 1 + 2 = 5
  • 203 → 2 + 0 + 3 = 5

Wavelengths sharing the same Path Number tend to produce harmonically aligned wave structures, making the Path Number a useful quick-reference for identifying compatible cycle configurations.

Radio Wave Cycle — RWC Settings Panel

RWC Settings

The indicator provides five primary cycle configuration parameters that define the entire wave structure:

  • Start Date — The anchor date from which all cycle calculations originate. Select a historically significant market event, major top or bottom, or known cycle origin for the most coherent alignment.
  • Base Wave Length — The root wavelength value used to generate the first cycle layer. All subsequent layers are derived from this base by adding incremental Step values.
  • Number of Cycles — Sets how many individual cycle layers are computed and aggregated into the composite wave. More layers produce a richer, more complex composite signal.
  • Step — The increment applied to the Base Wave Length for each successive cycle layer, progressively adjusting the wavelength to create harmonic variation across layers.
  • Cycle Part — Selects which phase of the composite wave to analyze: Rising to focus on positive/upward wave segments, or Falling to target negative/downward segments.

Backtesting & Trade Simulation

Radio Wave Cycle integrates a complete trade simulation engine that allows users to test cycle-based strategies directly on TradingView charts without any external tools. The engine supports both Long and Short simulation with configurable entry and exit logic:

Entry Logic

  • Rising Signal — Entry triggers when the composite wave transitions into its positive/rising phase.
  • Falling Signal — Entry triggers when the composite wave transitions into its negative/falling phase.

Exit Logic

  • Wave Signal — Exit triggers when the composite wave reverses direction, providing cycle-aligned rule-based exits.
  • Bar Count — Exit triggers after a user-defined number of bars, enabling time-limited strategy testing regardless of wave state.
Radio Wave Cycle — Backtesting Parameters Configuration

Trade & Risk Management

The built-in trade engine automatically generates on-chart visual markers for every trade event, with full customization of all risk parameters:

  • Stop-Loss — Toggle on/off with a percentage distance from the entry price. Renders as a labeled price level directly on the chart.
  • Take-Profit — Toggle on/off with a percentage distance from the entry price. Renders alongside the stop-loss for clear visual risk/reward reference.
  • Entry & Exit Levels — Visually marked at every signal trigger with configurable label sizes ranging from Tiny to Huge.
  • Commission Simulation — Separate entry and exit commission percentages adjust all profit/loss calculations and compound return metrics for realistic, cost-adjusted backtesting results.
Radio Wave Cycle — Trade Settings and Commission Configuration

Visual Signals & Chart Enhancements

Radio Wave Cycle enhances chart readability through multiple simultaneous visual layers:

  • Composite Wave Overlay — The RWC wave curve is plotted over price, showing rising and falling cycle phases in direct context with market movement.
  • Intra-Wave Layer Visualization — Individual cycle layers before aggregation are rendered separately to expose hidden sub-cycle structures and subtle market rhythms.
  • Trade Markers & Labels — Entry, exit, stop-loss, and target levels appear directly on the chart with fully customizable color schemes and label sizes.
  • Dynamic Candle Coloring — Price bars adapt color automatically based on the active trade state: Long trades use the Up Color, Short trades use the Down Color, and neutral periods use a configurable Neutral Color.
Radio Wave Cycle — Bar Color Settings and Trade Visualization

Performance Analytics & Statistics Table

A comprehensive performance table renders directly on the TradingView chart, summarizing all completed backtested cycles with the following metrics:

  • Signal Type — Displays the active backtest configuration combining Trade Side and Entry → Exit logic type.
  • Number of Trades — Total, winning, and losing trades executed during the backtest period.
  • Returns — Maximum, minimum, and average return per individual trade.
  • Win Rate — Percentage of profitable trades across the full backtest history.
  • Compound Return — Compounded equity growth across all trades, displayed both before and after commission depending on active settings.
  • Bars Left — Real-time display of how many bars remain until the current open trade is scheduled to close.

The table position, text size, frame color, and border color are all individually configurable for seamless integration into any chart layout.

Radio Wave Cycle — Performance Statistics Table on Chart

Alert System

Four independent alert types can be enabled or disabled individually, ensuring precise notification control aligned to your active strategy:

  • Entry Alert — Triggers when a new trade entry signal is generated by the wave phase transition.
  • Exit Alert — Triggers when the position is closed by the configured exit condition (wave reversal or bar count).
  • Stop-Loss Alert — Triggers when price reaches the defined stop-loss level.
  • Take-Profit Alert — Triggers when price reaches the defined take-profit target.

How to Use: Step-by-Step

Follow this sequence to implement Radio Wave Cycle correctly from the first session:

  • Step 1 — Set the Start Date. Choose a meaningful historical anchor point for the cycle engine. A major market top, bottom, or known cyclical event typically produces the most coherent wave alignment. Experiment with multiple dates to find the one that best maps against historical reversals on your target asset.
  • Step 2 — Define the Base Wave Length and Number of Cycles. Set the core cycle duration and select how many layers to aggregate. Begin with a round number (e.g., 144, 200, 365) and observe how cycle completions align with price turning points before fine-tuning. Use the Path Number as a harmonic reference to identify compatible wavelength variants.
  • Step 3 — Select Rising or Falling Wave Phase. Match the Cycle Part to your directional bias. If you are testing Long strategies, select Rising to focus on positive wave segments. For Short strategies, select Falling to isolate negative wave segments.
  • Step 4 — Configure Backtesting Parameters. Set Trade Side (Long or Short), Entry Based On (Rising or Falling signal), and Exit Based On (Wave Signal or Bar Count). If using Bar Count, define the number of bars for the holding period. These settings define the complete trade logic the engine will simulate.
  • Step 5 — Enable Trade Settings, Alerts, and Commission. Activate stop-loss and take-profit with appropriate percentage distances. Enable commission simulation using your broker's actual entry and exit fee rates for cost-realistic results. Turn on individual alert types relevant to your monitoring workflow.
  • Step 6 — Run the Indicator. Once configured, trade markers, colored candles, and the performance statistics table render automatically. Review the wave curve overlay to validate that rising and falling phases align meaningfully with historical price movements.
  • Step 7 — Review the Statistics Table and Optimize. Use win rate, compound return, average trade return, and total trade count to evaluate the configuration's historical effectiveness. Iteratively adjust Start Date, Base Wave Length, Number of Cycles, and Step to optimize cycle alignment for your specific market and timeframe before committing real capital.

Technical Specifications

  • Platform: TradingView
  • Language: Pine Script v6
  • Required Timeframe: All timeframes supported
  • Supported Assets: Forex, Crypto, Stocks, Commodities, Indices
  • Wave Method: Sine Wave Aggregation (multi-layer composite)
  • Operation Modes: Rising Phase · Falling Phase
  • Backtesting: Long & Short simulation with commission modeling
  • Exit Modes: Wave Signal Reversal · Fixed Bar Count
  • Alert Types: Entry · Exit · Stop-Loss · Take-Profit (individually configurable)
  • Updates: Lifetime updates included with active subscription
  • Last Updated: January 2025

Important Disclosure

Radio Wave Cycle – AlgoFuego is a technical analysis and market timing research tool, not a guaranteed profit system. While cycle-based models offer meaningful perspective on market rhythm and timing, past cycle behavior does not guarantee future performance. Market conditions are shaped by fundamental developments, macroeconomic events, and sentiment shifts that purely time-based models do not account for. Always apply sound risk management practices and use Radio Wave Cycle signals as one component of a broader, well-tested trading framework.