Hilbert Sine Wave – How This Little Known Indicator Transformed My Trading

The most accurate indicator I’ve ever seen – I couldn’t trade without it!

Hilbert Sine Wave (16:46)

“I paid for the Better Sine Wave indicator on my first trade today.” Michael L.

“I’m hooked on the Better Sine Wave indicator.” Mark C.

“I am amazed at what this indicator can do.” Victor H.

The Hilbert Sine Wave is a unique indicator …

hilbert sine wave unique

Hilbert Sine Wave: Works in Trends & Cycles

The Hilbert Sine Wave was developed by John Ehlers and first published in his book “Rocket Science for Traders”. The indicator uses an algorithm, originally applied to digital signal processing, that measures the amount of cyclical energy in a stream of data, for example, a stream of market prices.

The indicator produces a sine wave plot, as shown in the bottom half of the Emini chart above. Two lines are drawn (blue and red) and crossovers signal cyclical turning points.

What makes this indicator unique is that it distinguishes between cyclical and trending price activity. During periods when the price activity is trending, and not displaying cyclical characteristics, the lines do not cross and the indicator does not plot the normal sine wave – the lines look “out of sync”.

Markets alternate between periods when price is range bound or cycling and periods when price is moving to a new level or trending. Cyclical periods are characterized by price bouncing off support or resistance levels and failed breakouts or “overshoots”. Trending periods are characterized by new highs or new lows and pull backs (PB) that then continue in the direction of the trend, until exhausted (END).

In this way, the Hilbert Sine Wave combines the best characteristics of an oscillator – signaling over-sold and over-bought in a cyclical range – as well as the best characteristics of a moving average – signaling the start and end of a trending move.

How is the Better Sine Wave … better?

I first came across the Hilbert Sine Wave 10 years ago and was hooked from the beginning – it seemed to describe market activity in any time frame much more elegantly than a moving average or Elliott wave series could.

Since then I’ve added to the raw cycle measuring part of the code and improved upon it – that’s why I call my version “better”. The Better Sine Wave includes:

“Smart” support and resistance levels when price is cycling and in congestion
Pull Back and End of Trend signals when price is in trending mode
No cycle “glitches” when used with Forex data, and
Input data smoothing using the Jurik Moving Average (JMA)

Today, I couldn’t trade without the Better Sine Wave – for me, it puts everything in context. Showing me what the market structure is – are we in consolidation and waiting to break out into a trend or are we in the middle of a trend and waiting for the market to top (or bottom) out.

Note: A number of Hilbert Sine Wave versions have been published over the years. I’ve compared them all in this article: Hilbert Sine Wave – Which Version Is Best?

Confirm Hilbert Sine Wave turns with non-correlated indicators …

hilbert sine wave confirmation

Hilbert Sine Wave: With Confirming Indicators

A key skill when trading with the Hilbert Sine Wave is determining whether a cyclical turning point is valid or not. That is, will price “respect” the support or resistance level, or “overshoot” and turn into a trend move instead?

I use my 2 other non-correlated indicators to help make this decision. Better Momentum measures buying and selling volume; Better Pro Am identifies Professional and Amateur activity based on the average trade size.

As an example, the Emini chart above shows a top being made. Better Sine Wave has made a Pull Back to End of Trend sequence and the market then stalls in a cyclical range. The change into a down trend is confirmed by the following sequence:

Exhaustion buying (large cyan dots) on Better Momentum
Then bearish divergence (small white dots) showing weaker buying volume
Professionals (blue up bars) taking profits on the highs
Then Amateurs (yellow up bars) buying the highs and expecting the move to continue, only to be wrong footed

This same sequence of price, volume and average trade size is repeated time and again at market turning points, both bottoms and tops.

And use Hilbert Sine Wave on multiple times frames …

hilbert sine wave mtf

Hilbert Sine Wave: On Multiple Time Frames

Then when these patterns using the Hilbert Sine Wave (along with volume momentum and average trade size indicators) occur simultaneously in two different time frames, the probability of a valid market turning point is greatly increased!

Trend moves in lower time frames will look like large cycle moves in higher time frames, as shown in the Emini 4,500 and 500 tick charts above. In the highest time frame (4,500 tick) we have a cyclical move up from 1,178 to 1,192 highlighted. In the lowest time frame (500 tick) the market has made a Pull Back to End of Trend sequence at the lows around 1,178 and then proceeds to make a mirror Pull Back to End of Trend sequence at the highs around 1,192.

The cyclical turns in the highest time frame is used to determine the overall trend. Then the lowest time frame is used to time entries. In my trading I use 3 time frames, each a multiple of 3 times the lower time frame:

Day Trading: 500, 1,500 and 4,500 tick (500 x 3 = 1,500 and 1,500 x 3 = 4,500)
Swing Trading: 45 min, 135 min and Daily (45 x 3 = 135 and 135 x 3 = Daily)
Position Trading: Day, Week and Month (Day x 5 = Week and Week x 4 = Month)
Or anything in between: 1 min, 3 min, 9 min or 5 min, 15 min, 45 min, etc.

When turning points in 2 of the 3 time frames coincide, the chances of a large range move are increased. Since the Better Sine Wave indicator can be used to predict cyclical turning points AND the end of trending periods, it is uniquely capable of being used in multiple time frame analysis.

Again, remember to look for confirmation from volume momentum and average trade size patterns to increase your winning percentage.

Hilbert Sine Wave works on all time frames & all markets …

hilbert sine wave crude oil

Hilbert Sine Wave: Crude Oil Daily Example

The beauty of the Better Sine Wave indicator, and the support and resistance levels it generates, is that it can be used to define market structure in any time frame:

Tick bars
Minutes
Hourly
Daily
Weekly, and
Monthly

And for any instrument or market:

Futures
Stocks
FX
Indices
Options, etc.

The chart above shows the Better Sine Wave on a daily chart of Crude Oil – showing the same pattern of support/resistance lines and pull back/end of trend sequences.

This truly is a “universal” indicator.

Hilbert Sine Wave – Summary

I hope the video and charts above have shown:

The Hilbert Sine Wave is a unique indicator – it combines the best characteristics of an oscillator as well as the best characteristics of a moving average.
The “Better Sine Wave” is an improved version of John Ehler’s Hilbert Sine Wave – it defines market structure with support and resistance levels during cyclical periods; and breakouts, pullbacks and end of trend signals during trending periods.
Market turning points and high probability trades can be identified using the Hilbert Sine Wave in combination with volume momentum and average trade size analysis.
Trend moves in a lower time frame are cycle moves in a higher time frame – a key concept when trading with multiple time frames. Again, this can be used to confirm turning points and identify high probability trades.
The “Better Sine Wave” indicator works in any time frame (tick to monthly charts) and for any market (futures, stocks, forex, etc.).

Go to the bottom of this page to purchase the Better Sine Wave indicators, video tutorials and trading manual.

What People Are Saying About The Better Sine Wave

“Love the Better Sine Wave indicator on tick charts – it picks a ton of great trades. I have been investing/trading for 15 years and your indicators have re-lit the fires under my feet. Great work.” John R.

“I am amazed at what this indicator can do. It really does work for all time frames and all markets. I have been watching the Better Sine Wave indicator on the ER2 1,000 share volume bar chart … just amazing! I use it to scalp 1-1.5 point trades or sometimes to scale out. I had never even heard of this indicator until I went to your site! Great work Barry.” Victor H.

“I paid for the Better Sine Wave indicator on my first trade today. I was in a trade using my existing system but the Better Sine Wave identified a top on the 233 tick chart. Instead of using my usual profit target, I exited. 40 minutes later and we’re back down at my entry level – I’m glad I followed that exit signal!” Michael L.

“I'm hooked on the Better Sine Wave indicators.” Mark C.

“I have bought so much crud and been misled by so many. Finally, I found your tools and think they’re practical and valuable. I purchased the Better Sine Wave and Better TRIN and am very thankful. Everyone else seems to be charging so much money and I appreciate the fact that so much of your stuff is either free or a nominal fee – very refreshing.” David B.

“I love the Better Sine Wave and the support and resistance levels it generates. It works really well.” Anon. (4Q Survey results)

“Your improvement on Ehlers’ indicator is really, really good

Your Better Sine Wave indicator is great!” Paolo A.

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“Barry, Better Sine Wave indicators working well. Helps with the rhythm of the market.” Robert W.

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“Your version of the Hilbert Sine Wave is far superior!” Joe D.

“This morning I was able to make 3 trades at 2 points profit per trade on the Emini using your Better Sine Wave and the 233, 699, 2097 tick chart setup!” Guy

“Verrrry nice! Very, very nice, I must say. I've never seen Ehlers’ Sine Wave combined with what I would call a quasi-Elliott interpretation. What a marvelous idea!” Frank J.

“GREAT JOB ON THE VIDEOS! As usual! I like using the Better Sine SR best of all, it really helps. Thanks for this great indicator and the emails that you send me. Please keep them coming – I look forward to reading them.” Vinnie M.

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“Thank you for your Better Sine Wave. It has really helped me to understand cycles and the fractal nature of the markets. I knew the markets were fractal but it’s much clearer with the Better Sine Wave.” Michael M.

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“Barry, I love my new Hilbert Sine Wave. P.S. Your work is great.” Carl E.

“The videos are great and make the Sine Wave completely understandable. After viewing them, I feel stronger about my previous email – you are giving this away.” Larry G.

“I have been using the Better Sine Wave with great results. Thank you.” Glenn

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“Have had great experience with your Better Sine Wave and Better Volume.” Rory G.

“I wanted you to know that your Better Sine Wave indicator has been a breakthrough in my day trading. I am consistently pulling 2-4 pts per contract a day out of the market. I thought you might enjoy hearing from a satisfied customer. You have helped make day trading fun for me again.” Isaac M.

“Hi Barry, I am just so grateful to you, you can't imagine. I am using the Better Sine Wave and Better Volume indicators, along with the 5 minute MACD and 60 minute support and resistance levels. Again, thank you, thank you!” Neil F.

“I have had tremendous success incorporating your ‘Better’ indicators into my trading style, and in a VERY basic simple way, writing my own Easy Language utilizing your Better Sine Wave function.” Robert C.

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” Rick F.

“Better Sine Wave is fantastic! Love how it plots support & resistance levels. Great to see trends, repeatable cycles & how it compliments Better Pro Am.” Renato G.

“The Better Sine Wave of yours has really improved my trading.” John D.

“Better Sine Wave is a very, very clever indicator.” Geoff M.

“Barry, I just wanted to mention how impressed I am with the Better Sine Wave SR indicator. I’ve been using it on a weekly chart of the S&P 500 for the last couple of years. What I notice so often in charts of all timeframes is that when the Better Sine Wave SR works (a majority of the time) it works nicely, but when it fails it does so usually in spectacular fashion. I call it a ‘failure’ when prices plunges through support/resistance in the opposite direction than what is called for. In that sense, the Better Sine Wave SR can often be even more useful when it ‘fails’. Either way, the Better Sine Wave SR shows major inflection points in the market that other indicators just don’t pick up. How cool is that? An indicator that when it succeeds it works well, when it fails, it works even better!!!” George D.

The Better Sine Wave Indicators

The Better Sine Wave indicators shown in the videos and charts above are now available for sale and immediate download. Here's what you get:

Better Sine Wave Product Image

3 Better Sine Wave Indicators for TradeStation, MultiCharts or NinjaTrader
EasyLanguage Function to program your own systems & indicators
9 High Definition Video Tutorials (54 min) with everything you need to know
55-page Trading Manual with annotated charts to accompany the video tutorials
The indicators work on all charts and use the improved Sine Wave code – no cycle glitches & better entry signals
All the indicators have alerts so you can be warned when new support or resistance levels are drawn or breakouts, pullbacks and end of trend signals occur
Bonus indicator: Better Sine Wave Paint Bar (plots trending periods)
Jurik Moving Average versions of the indicators (not MultiCharts)
Locked code

The 9 Better Sine Wave high definition online video tutorials – total 54 minutes – cover the following topics: