7trade Cipher B: waves, zones and the agreement strip
Cipher B is a panel below the chart. Its core is two waves: they show how far the price has moved from its average and when that move turns. Around the waves are the money flow, RSI, the stochastic, divergences from the price and the agreement strip, which counts how many parts of the indicator are for a rise right now. After this article you will understand every layer of the panel, the events for strategies and all the settings. How to turn the indicator on is covered in "7trade bot: introduction".
Why it is useful
When the wave goes far up, the price is far from its average and the rise may be fading. When the wave goes far down, the same is true for a fall. A Cipher B signal is a turn of the waves right there, at the edge: a wave cross in the overbought or oversold zone.
The panel is adapted for binary options:
- signals in both directions — CALL and PUT are equal, so even the gold mark exists not only for buying but also for selling;
- the agreement strip — one colour shows how many parts of the indicator are for a rise and how many for a fall, including the vote of the higher timeframe;
- the next-arrow threshold — on the right you can see at which close the waves will cross and whether that will give an arrow;
- three views — a small panel shows the essentials, not all layers at once.
Below is a live chart on real candles. Click it to open it large; there a click on an arrow or a zone shows an explanation. The ⚙ icon opens the settings window.
What is on the panel
Waves and levels
| Element | Meaning |
|---|---|
| WT1 wave (fast) — fill from zero | How far the price has moved from its average. Above zero buyers prevail, below zero sellers |
| WT2 wave (slow) — dark, under the fast one | The same value with a delay. What matters is not where it is, but the moment the fast wave crosses it |
| Zero line and levels | Zero is the border between buyers and sellers. Solid lines at 60 and −60, a dashed line at 100. The signal zone starts at 53 and −53; in the "Signals" view it is filled with colour |
| VWAP cloud | The difference between the waves: the wider, the sharper the move. When it shrinks to zero, a cross is near |
Signals
| Mark | Meaning |
|---|---|
| Green arrow or mark at the bottom | Buy mark: the waves crossed up in the oversold zone. The zone is filled with the same colour |
| Red arrow or mark at the top | Sell mark: the waves crossed down in the overbought zone |
| Gold mark, larger than the others | The rarest signal: four conditions matched at once — a divergence from the price, the previous wave dip in the deep zone, a way out of it with a noticeable gap, and a very low RSI in that dip. The gold sell mark is the mirror case, in a slightly cooler shade |
| Small circle on the wave | Every wave cross, in a zone or not. It is an event, not a selected signal, so there are many circles. Only in the "Full" view |
| Dot at a wave peak | A divergence of the wave from the price: the price made a new peak, the wave did not. The dot is placed back at the peak itself — a divergence can only be confirmed two bars later |
Other layers
| Layer | Meaning |
|---|---|
| Money Flow — green and red area around zero | Whether money is flowing into the asset or out: green is inflow, red is outflow. Calculated from the candles themselves, no volume needed |
| Trend strip at the bottom edge | The same as Money Flow, as a narrow strip. Empty where there is no value yet |
| RSI line | The classic RSI on the panel scale. Red above the overbought threshold, green below the oversold threshold, purple in between |
| Stochastic RSI — two lines | A stochastic calculated from RSI. The fill between the lines changes colour depending on which one is on top |
| Schaff Trend Cycle | One more oscillator, off at the start. A thick underlay and a thin line on top |
| Agreement strip at the top edge | Parts of the indicator vote — see below |
The agreement strip
On each bar parts of the indicator vote, each "up" or "down":
- the waves — the fast one above the slow one means "up";
- Money Flow — a green area means "up";
- RSI — above 50 means "up";
- the stochastic — the K line above the D line means "up";
- the higher timeframe, if it is on — its fast wave above its slow one.
| Strip colour | Meaning |
|---|---|
| Bright green | All votes for a rise |
| Pale green | More for a rise than for a fall |
| Grey | Equal |
| Pale red | More for a fall |
| Bright red | All votes for a fall |
The count on the last bar is written in the panel header, for example "agreement: for a rise 3 of 5".
The next-arrow threshold
A tag to the right of the last candle: at which close the waves will cross and how many points that is from the price. A coloured tag means the cross will fall into a zone and give an arrow. A grey tag means the cross will be outside a zone, no arrow. No tag means one candle cannot make the waves cross.
Hints
Click an arrow, a zone, the strip or a divergence dot to see a plate: what it is and what to do with it (a coloured dot and "CALL", "PUT" or "Wait"). The plate stays until you click elsewhere. To make it appear on a simple mouse hover too, turn on "Show the explanation on hover" in the "Panel view" section — it is off at the start. Under the line in a pinned plate is the state of the last bar: where the wave is, which wave is higher, inflow or outflow, the agreement count, the higher timeframe, when the last signal was.
Three views
The "What to show" switch in the "Panel view" section. The calculation is the same in all views — only the picture changes.
| View | What you see |
|---|---|
| Signals | The waves, signal zones as fills and arrows where the waves crossed in a zone. Money Flow only as the strip at the bottom. This is the starting setup |
| Trend | The waves, the Money Flow area and the agreement strip. No marks: the view shows which side is stronger now |
| Full | All layers at once. The checkboxes in the sections below decide which of them are visible |
Events for strategies
In the "Strategies" window the events are listed with the prefix "Cipher B:". CALL and PUT are the trade direction.
A transition event fires once, on the bar where something happened. A state event is true for many bars in a row: as an entry rule it would open a trade on every candle, so it is used as a confirmation.
Waves
| Event | When it fires | CALL / PUT |
|---|---|---|
| signal (circle in a zone) | The indicator's main signal: the waves crossed and the slow wave is in a zone | Up in oversold / down in overbought |
| WaveTrend wave cross | Any wave cross | The fast wave crossed the slow one up / down |
| wave cross OUTSIDE zones | A cross where the indicator does not mark it. It never coincides with the main signal | Up / down |
| VWAP cloud — fast wave above or below the slow one | State: which wave is on top now | Fast above / below |
| wave above or below zero | State: which side of zero the wave is on | Above / below |
| wave in the overbought or oversold zone | State: the slow wave is in a zone. The borders are the same as for signals | In oversold / in overbought |
| wave leaves the zone | The slow wave leaves a zone — once, on the exit bar | Left oversold upwards / overbought downwards |
| gold signal | The gold mark | Buy / mirrored sell |
Divergences from the price
| Event | When it fires | CALL / PUT |
|---|---|---|
| wave divergence from the price | The price made a new extreme, the wave did not. Searched only in the search zones | New price low with a higher wave low / mirrored |
| hidden wave divergence | The other way round: the price did not make a new extreme, the wave did. Read as a continuation of the move | Bullish / bearish |
| wave divergence in the extended range | The same figure in zones closer to zero | Bullish / bearish |
| RSI divergence from the price | A divergence of the price from the RSI line | Bullish / bearish |
| stochastic divergence from the price | A divergence of the price from the stochastic K line. No zone limits — the most frequent of the three | Bullish / bearish |
| any divergence — waves, RSI or stochastic | Any of the divergences above. If a bullish and a bearish one meet on a bar, there is no side | Bullish / bearish |
| divergence on the recent bars | The same as a state: it holds for a few more bars after the figure | Bullish / bearish |
A divergence is confirmed two bars after the peak, while a wave cross is confirmed at once. They hardly ever fall on the same bar. So the combination "enter on the waves, confirm with a divergence" is built from the event "divergence on the recent bars".
The agreement strip and the higher timeframe
| Event | When it fires | CALL / PUT |
|---|---|---|
| agreement strip vote lead | State: votes on one side lead by 2 or more. The threshold is changed in the strategy rule | Lead for a rise / for a fall |
| all agreement strip votes aligned | Once, on the bar where all votes first end up on one side | All for a rise / all for a fall |
| higher TF waves | State: the fast wave of the higher timeframe is above the slow one. Changes once every few candles. Silent if the higher TF is off | Above / below |
Money Flow, RSI, stochastic, Schaff Trend Cycle
| Event | When it fires | CALL / PUT |
|---|---|---|
| Money Flow — inflow or outflow | State: the area is above or below zero | Inflow / outflow |
| Money Flow changed (inflow ↔ outflow) | The area crossed zero | Outflow became inflow / the other way |
| RSI in the extreme zone | State: RSI is beyond a threshold | In oversold / in overbought |
| RSI relative to the middle | State: RSI is above or below 50 | Above 50 / below 50 |
| stochastic RSI — %K crosses %D | A cross of the stochastic lines | Up / down |
| stochastic RSI — %K above or below %D | State: which line is on top | K above / below |
| stochastic RSI in the extreme zone | State: the K line is below 20 or above 80. These thresholds cannot be changed in the settings | Below 20 / above 80 |
| Schaff Trend Cycle relative to the middle | State: the line is above or below 50 | Above 50 / below 50 |
The starting RSI thresholds are 30 and 60, not 30 and 70: the upper threshold sets the colour of the line. So the event "RSI in the extreme zone" answers PUT more often. If you need symmetry, set the overbought threshold to 70.
"RSI in the extreme zone" and "RSI relative to the middle" read the same thing in opposite ways: at RSI 25 the first one says CALL, the second one PUT. They are never used as two confirmations in one rule — the entry would never happen.
All settings
The window opens with the ⚙ icon — on the Cipher B card in the "Indicators" window or in the panel header. Almost every field has a hint on hover. While a strategy with Cipher B is running, the panel uses that strategy's settings, not the window's.
Panel view
| Field | What it does |
|---|---|
| What to show | The view: "Signals", "Trend" or "Full" |
| Explain elements on hover and click | The main switch for the plates |
| Show the explanation on hover | The plate follows the mouse. Off at the start: a click on an element works without it |
| Add the state to the plate | Lines about the last bar in a pinned plate |
WaveTrend waves
| Field | What it does |
|---|---|
| Show the waves | Both waves |
| Channel length | Over how many bars the deviation of the price from its average is measured. Less — a jumpier wave and more signals; more — smoother and later |
| Averaging length | Smoothing of the wave itself |
| Signal smoothing | This average of the fast wave gives the slow one |
Levels and the zero line
| Field | What it does |
|---|---|
| Overbought — signal threshold | Above this level a downward wave cross becomes a sell signal. The zone fill in the "Signals" view starts here |
| Overbought — solid line | The level line |
| Overbought — dashed line | The far line, only for the eye |
| Oversold — signal threshold | Below this level an upward cross becomes a buy signal |
| Oversold — solid line | The level line |
| Oversold — deep zone | Needed by the gold mark, not drawn as a line |
Signals and crosses
| Field | What it does |
|---|---|
| Buy marks (bottom) | Green marks |
| Sell marks (top) | Red marks |
| Divergent signal marks | A separate row at the panel edges: a signal that coincided with a divergence. Only in the "Full" view |
Gold signal
| Field | What it does |
|---|---|
| Gold buy mark (bottom) | The mark itself |
| Gold sell mark (top) | The mirror of the gold buy |
| RSI in the trough — no higher than | How low RSI must be in the previous wave dip |
| RSI at the peak — no lower than | The same for selling. This is not the RSI colour threshold from the "RSI" section |
| Deep zone above (for sell) | The mirror of the deep zone below |
| Wave gap, units | How far the wave must move away from the previous extreme |
Divergences
| Field | What it does |
|---|---|
| Look for wave divergences | Divergence dots on the wave |
| Hidden divergences | The other way round: the price did not make a new peak, the wave did |
| Hidden — without zone limits | Look for hidden divergences across the whole scale |
| Search zone above / below | A peak is good for a divergence only beyond these levels |
| Second divergence range | A second, softer range — closer to zero |
| Second range — above / below | Its borders |
VWAP (Fast WT)
| Field | What it does |
|---|---|
| Show the VWAP cloud | The difference between the waves as a fill from zero. Only in the "Full" view |
Money Flow (RSI + MFI)
| Field | What it does |
|---|---|
| Show the area and the trend strip | The green and red area and the strip at the bottom edge |
| Period | Over how many bars the flow is calculated |
| Area multiplier | The height of the area. Less — on a calm market it shrinks to a few pixels |
| Vertical offset | Moves the area relative to zero |
RSI
| Field | What it does |
|---|---|
| Show the RSI line | The line itself |
| RSI period | Over how many bars RSI is calculated |
| Oversold threshold | Below it the line is green |
| Overbought threshold | Above it the line is red |
| RSI divergences | Divergence dots on the RSI line. They also affect the divergent signal marks |
| Hidden RSI divergences | The other way round |
| Search zone above / below | Where to look for RSI divergences |
Stochastic RSI
| Field | What it does |
|---|---|
| Show the stochastic | The two stochastic lines |
| Logarithmic price | Calculate from the logarithm of the price |
| Average of three prices | Use the average of close, high and low instead of the close |
| Stochastic period | The stochastic window |
| Inner RSI period | The RSI period the stochastic is calculated from |
| K smoothing / D smoothing | Smoothing of the two lines |
| Stochastic divergences / Hidden stochastic divergences | Divergence dots |
Schaff Trend Cycle
| Field | What it does |
|---|---|
| Show Schaff Trend Cycle | The oscillator line, only in the "Full" view |
| Cycle period, Fast EMA, Slow EMA, Smoothing factor | Calculation parameters |
Binary options
| Field | What it does |
|---|---|
| Show the agreement strip | A narrow strip at the top edge. Always visible in the "Trend" view |
| Higher TF — how many times longer than the current one | A higher timeframe bar is glued from this many current bars: on M1 at 3 it is a three-minute bar. Only a closed higher TF bar votes. 0 — off |
| Next-arrow threshold on the right | The tag to the right of the last candle. Not shown in the "Trend" view |
| Expiry, bars | Trade length in bars. The distance to the threshold is compared with it |
| Typical move — over how many bars | Over how many recent bars the typical price move per trade is calculated |
The higher timeframe needs about 30 of its own bars to warm up: at a multiplier of 3 that is about 90 current bars. Until then the strip counts without it.
Presets
A preset sets all calculation parameters anew and leaves the view and colours alone.
| Preset | What it sets |
|---|---|
| 1-min trade | The typical move over one bar, the higher TF off |
| 3-min trade | Over three bars, higher TF ×3 — the starting setup |
| 5-min trade | Over five bars, higher TF ×5. It warms up longer — about 150 bars |
| More arrows | Signal zones from ±45: more arrows, but the crosses are closer to the middle |
| Fewer arrows | Signal zones from ±60: arrows only when the wave goes deep |
Legend
All panel colours in one list: what is drawn in which colour and what it means. Each colour can be changed. Here is also the button that returns all settings to the starting ones.
What Cipher B does not do
- It does not know the future. The waves are calculated from closed candles. An arrow means the waves have already turned, not that the price will turn.
- It does not enter trades by itself. Trades are opened by a strategy from the "Strategies" window.
- It does not look at volume. Volume on the platform means ticks: how many times the price changed during the candle, not the volume of trades. Money Flow is calculated from the candles themselves.
- It does not show a divergence at once. A divergence dot appears two bars after the peak and is placed back at the peak itself.
Frequently asked questions
Why are there so few arrows? An arrow is only a cross in a zone. There are many crosses, but they are rare at the edge of the scale. The "More arrows" preset moves the zones closer to zero.
How is a circle on the wave different from an arrow? A circle marks every wave cross, an arrow only a cross in a zone.
Why is the agreement strip empty at the start of the chart? The higher timeframe and the money flow need to warm up. After you switch the asset, the strip fills in after a few dozen bars.
Why is a divergence dot further left than where it appeared? It can only be confirmed two bars after the peak, and it goes back to the place of the peak itself.
I changed a setting, but the panel is the same. If a strategy with Cipher B is running, the panel uses its settings. Stop the strategy or change the settings inside it.