From the March 01, 2010 issue of Futures Magazine • Subscribe!

Software review: Wave59

Wave59

Wave59 Technologies
637B South Broadway, Ste. 107
Boulder, CO 80305
Phone: (303)494-7613
Web site: www.wave59.com

System Requirements:

Windows XP or later (Vista, Windows 7)

Suitably configured, late model PC:

Pentium IV or later

Intel Quad-Core CPU, 2.66Ghz or higher (recommended)

2Gb RAM (minimum); 3Gb RAM (recommended)

Disk usage approx. 50MBytes

Single high resolution monitor

Broadband internet connection

Price:
Wave59 EOD $149/month lease; $2750 purchase, expects free internet data

Wave59 PRO $249/month lease (including data); $5700 purchase, with $90/month data

Wave59 PRIVATE $299/month lease (including data); $7500 purchase, with $90/month data


Overall Rating
: 3 of 4

Wave59 is a feature-rich desktop trading environment with some very innovative indicators, drawing tools and trading system development software. The product is ambitious and contains a large number of features that span the technical analysis landscape. Because of this, it is difficult to evaluate the product stand-alone and a competitive analysis is helpful. The overall rating of the product was due in part to some specific price-performance comparisons with industry-leading trading desktops.

A 4 of 4 rating for product innovation seems appropriate, however, because Wave59 certainly offers some very unique technical tools. Some traders may find its intriguing trading tools  and there are many  worth the price point.


Installation, documentation and support
: 3 of 4

The reviewer had no issues installing the Wave59 desktop. However, the software has an overall lesser maturity level than competing products such as TradeStation. For example, referencing futures symbols takes the user to a separate PDF file as opposed to an integrated asset search and listing feature, and the user must map asset names to actual Wave59 symbols, rather than simply clicking a symbol name. Bar chart settings are sometimes awkward. The user must manually select chart dates as opposed to simply specifying a range of dates. Tick level data and new bar types that are now part of popular trading desktops (Kagi, Range, Renko, etc.) are not available.

Documentation is well-integrated but in some cases limited. Wave59 does not provide the complete source code descriptions to underlying indicator implementations. Some of this is due to the novelty of the tools and the need to protect intellectual property. But in general it means the user is not able to fully investigate how the technical analysis has been implemented.

The relatively smaller Wave59 customer base means users may receive superior customer support, but the smaller user community has a downside too. Investigating the online QScript user library (QScript is the Wave59 indicator and scripting language) showed approximately 90 user scripts; by comparison, TradeStation’s EasyLanguage user library contains more than 1,400.

A Wave59 bookstore offers additional trading materials at reasonable prices (less than $100) as well as some very pricey, third-party training (significantly more than $1,000).


Features and Functionality
: 2.75 of 4

Wave59 runs as a single desktop interface that can contain any number of windows for charts with various assets (stocks, futures, etc.), drawing tools, and QScript authoring windows. Multiple desktops (multiple PC displays) are not supported. Wave59 menus are present across the top and sides of the desktop and are self-explanatory and easy to use, if sometimes a bit cartoonish.

Wave59 comes packaged with approximately 50 technical indicators. Key Wave59 features are hidden within underlying functions whose implementations are inaccessible to the user. However, the QScript programming language allows indicators to be combined, so that new indicators using the basic Wave59 functions can be created. (By comparison, TradeStation comes packaged with 883 indicators and functions, with all source code visible to the user.)

The novelty of Wave59 indicators distinguishes the product. A smart money index indicator caught this reviewer’s eye. While the media describes a general smart money index to be a cumulative difference between DJIA first hour (the “dumb” money) and last hour (the “smart” money) price moves, and thus applicable mainly to daily charts, the Wave59 indicator appears to produce good intra-day trading signals.

There are “astrophysics” indicators which allow the trader to look for correlations between planetary and solar system cycles and trading activity. And there are numerous drawing tools that can be used to overlay price charts and estimate future price action. These extend the widely used Fibonacci retracement techniques to lesser known relationships, including the logarithmic spiral and other geometric patterns. While the efficacy of such tools is questionable, the Wave59 interface to the tools is certainly creative.

This reviewer experimented with the “Pattern Builder” tool and easily constructed a reverse head-and-shoulders pattern and then had Wave59 search a 5-minute bar chart for matches. It was impressive to see the software pick up recognizable head-and-shoulders patterns.

The QScript language is used to build new indicators, which can begin with the Wave59 function library. QScript appears to be a straightforward programming language addressed to the non-programmer. There is a TradeStation EasyLanguage-to-QScript convertor for moving users from the TradeStation platform to Wave59. The convertor worked flawlessly when converting the standard MACD indicator but failed when more intricate code using multiple arrays was attempted (the reviewer gave up the conversion after an hour of trying, aware that 100% accurate programming language conversion is extremely difficult). QScript translator execution was noticeably slow.

Another major product feature is the ability to program and back-test complete tradng system strategies using QScript. Back-testing tools and detailed performance reports can be produced. Wave59 appears to offer many of the well-publicized TradeStation system test features and with one important addition: Multiple, independent strategies can be combined to produce a total strategy portfolio result  something sorely lacking in competing products.

There is also a neural net program that can be used to optimize strategies from historical data. The Wave59 price-point becomes increasingly justifiable when the user considers the wealth of tools the product incorporates. However, it was difficult, in the limited period given a review of this kind, to determine if all the Wave59 tools are truly state-of-the-art. For example, if a trader is interested in trade strategy optimization, is software from a vendor specializing solely in neural network software preferable?

Wave59 provides basic order entry features in QScript, but not enough to make complete automation easily programmed. Missing are some of the stop-loss, profit-target and trailing-stop interfaces strategy programmers have come to expect. Not having implemented and executed a complete, stand-alone strategy in QScript, this reviewer is unable to comment on the more subtle limitations in Wave59 automation.


Conclusion:

Wave59 is an innovative trading desktop providing some extremely novel technical analysis that is unique in the retail marketplace. The trade-off for the potential customer is that the overall maturity and functionality of the product is somewhat less than the competition. A trader will have to weigh the importance of having access to the novel features of Wave59 against its lack of competitive robustness. Given the individual nature of the trading endeavor, access to novel technical tools may outweigh the need for some of the more standard trading desktop features and put Wave59 at the top of an independent evaluation.

For 20 years Michael Gutmann was a software engineer and manager at Intel Corporation. He trades the E-mini stock index futures daily and wrote “The Very Latest E-Mini Trading: Using Market Anticipation to Trade Electronic Futures.” E-mail him at mike@vgxcapital.com

Comments
comments powered by Disqus
Check out Futures Magazine - Polls on LockerDome on LockerDome