Stochastic RSI - WT Confluence Signal Detectors (TraderDemircan)

Description
What This Indicator Does:
This indicator combines two powerful momentum oscillators—WaveTrend and Stochastic RSI—to identify high-probability trading signals through confluence. Instead of relying on a single indicator that may generate false signals, this tool only triggers buy/sell alerts when both oscillators simultaneously confirm extreme market conditions and trend reversals. This confluence approach significantly reduces noise and helps traders focus on the most reliable setups.
Key Features:

Dual-Oscillator Confluence: Generates signals only when both WaveTrend crossovers and Stochastic RSI extreme levels align
Normalized Scale Display: Both oscillators are plotted on a unified -100 to +100 scale for easy visual comparison
Visual Signal Confirmation: Clear intersection points marked with colored circles, plus optional candle coloring at crossover moments
Customizable Thresholds: Adjust overbought/oversold levels for both oscillators to match your trading style and asset volatility
Clean Visual Presentation: Optional area fill showing WaveTrend momentum difference, making divergences easier to spot

How It Works:
The indicator operates on a confluence principle where multiple conditions must align:
For BUY Signals (Green):

WaveTrend 1 crosses above WaveTrend 2 (bullish crossover)
WaveTrend is in oversold territory (below -53 or -60)
Stochastic RSI K-line is below 20 (oversold)

For SELL Signals (Red):

WaveTrend 1 crosses below WaveTrend 2 (bearish crossover)
WaveTrend is in overbought territory (above 53 or 60)
Stochastic RSI K-line is above 80 (overbought)

WaveTrend Component:
Uses the hlc3 price (average of high, low, close) to calculate a channel index that identifies market momentum waves. The two WaveTrend lines (WT1 and WT2) act similarly to MACD, where crossovers indicate momentum shifts. The oscillator ranges from approximately -100 to +100, with extreme values suggesting potential reversals.
Stochastic RSI Component:
Applies stochastic calculations to RSI values rather than raw price, creating a more sensitive momentum indicator. Values above 80 indicate overbought conditions (potential selling opportunity), while values below 20 indicate oversold conditions (potential buying opportunity). The indicator includes both K-line (faster) and D-line (slower, smoothed) for additional confirmation.
Normalization Technology:
To enable direct visual comparison, the Stochastic RSI (normally 0-100 scale) is normalized to match WaveTrend's -100 to +100 scale. This allows traders to see both oscillators' movements in relation to the same reference levels, making divergences and convergences more apparent.
How to Use:
For Trend Traders:

Wait for confluence signals in the direction of the larger trend
Use buy signals in uptrends as entry points during pullbacks
Use sell signals in downtrends as entry points during bounces

For Reversal Traders:

Focus on confluence signals at major support/resistance levels
Look for divergences between price and oscillators before confluence signals
Consider stronger signals when both oscillators reach extreme levels (WT beyond ±60, Stoch beyond 20/80)

For Scalpers:

Lower the WaveTrend Channel Length (default 10) to 5-7 for more frequent signals
Tighten overbought/oversold thresholds slightly (e.g., WT: ±50, Stoch: 30/70)
Use on lower timeframes (5m, 15m) with strict stop losses

Settings Guide:
WaveTrend Parameters:

Channel Length (10): Controls sensitivity. Lower = more signals but more noise. Higher = fewer but more reliable signals
Average Length (21): Smoothing period for WT2. Higher values reduce whipsaws
Overbought Levels (60/53): Two-tier system. Breaching 60 indicates strong overbought, 53 is moderate
Oversold Levels (-60/-53): Mirror of overbought levels for downside extremes

Stochastic RSI Parameters:

K-Smooth (3): Smoothing for the K-line. Higher = smoother but delayed
D-Smooth (3): Additional smoothing for the D-line signal
RSI Period (14): Standard RSI calculation period
Stoch Period (14): Stochastic calculation lookback
Oversold (20) / Overbought (80): Classic thresholds for extreme conditions

Visual Options:

Show WT Difference Area: Displays the momentum difference between WT1 and WT2 as a blue shaded area
Show WT Intersection Points: Marks crossover points with colored circles (red for bearish, green for bullish)
Color Candles at Intersection: Changes candle colors at crossover moments (blue for bearish, yellow for bullish)
Show Stoch Over Signals: Displays when Stochastic RSI breaches extreme levels

What Makes This Original:
While WaveTrend and Stochastic RSI are established indicators, this script's originality lies in:

Confluence Logic: The specific combination requiring simultaneous confirmation from both oscillators in extreme zones, not just simple crossovers
Normalization Approach: Displaying both oscillators on the same -100 to +100 scale for direct visual comparison, which is not standard
Multi-Tier Overbought/Oversold: Using two levels (60/53) instead of one, allowing for nuanced signal strength assessment
Integrated Visual System: Combining area fills, intersection markers, and candle coloring in a coordinated display that shows momentum flow at a glance

Important Considerations:

This is a momentum-based oscillator system, which performs best in ranging or trending markets with clear swings
In strong trending markets, the oscillator may remain in extreme zones for extended periods (remain overbought during strong uptrends, oversold during strong downtrends)
Confluence signals are intentionally rare to maintain quality—expect fewer signals than with single-indicator systems
Always combine with price action analysis, support/resistance levels, and proper risk management
Not recommended for extremely low volatility or thin markets where oscillators may produce erratic readings

Best Timeframes:

Intraday: 15m, 1H (with tighter parameters)
Swing Trading: 4H, Daily (with default parameters)
Position Trading: Daily, Weekly (with extended Channel Length 15-20)

Typical Use Cases:

Identifying exhaustion points in trending markets
Timing entries during pullbacks in established trends
Spotting potential reversal zones at key price levels
Filtering out weak momentum signals during consolidation