Even Better Sinewave Indicator Explained

John Ehlers' Even Better Sinewave (EBSW) models the market as a cycle and reports the cycle's phase as a wave between −1 and +1. In range conditions it anticipates turns — the wave rolls over as the cycle tops, rather than after price does.

How It Works

• A high-pass filter isolates the cyclic component of price.
• Super-Smoother filtering and normalization produce a clean ±1 wave.
• Wave peaks/troughs align with cycle highs/lows in ranging markets.

How to Trade It

In confirmed ranges, buy the wave turning up from below −0.7 and exit as it rolls over above +0.7. Crucially, add a trend gate: in strong trends the cycle wave pins to one side and countertrend readings become traps.

Building It in Setup.Cash

Add Even Better Sinewave in the strategy builder — the length input controls its sensitivity — and use its value in any entry, exit, or filter condition. You can also combine it with other tools in the Indicators Lab or via the AI indicator generator. Pairs with the Choppiness Index to confirm you're actually in a range. For the full category overview, see the advanced momentum library guide.

Momentum signals are timing tools — combine them with a trend or regime filter and backtest the exact rules before going live.