Forex Indicator Elliott Wave Oscillator has no settings.
The search for Elliott waves helps the trader determine where and how dynamic the price will move. Elliott Wave Theory can be quite effective on Forex, but, at the same time, it is complex in interpretation. If you read an article about the Elliott Wave Element theory, you already understood that it is extremely difficult to correctly determine all the waves. However, technical tools can be of great help in this.
The main task of Elliott Wave Oscillator is to identify the beginning and end of the 3 waves, since this wave has the largest amplitude. That is, on this wave you can earn the most if you enter it in time and get out.
The Elliott Wave Oscillator consists of 2 moving averages with periods of 35 and 5, which strongly resembles MACD. One can even say that this is practically one indicator, only here are specific periods taken.
Trading Signals – Elliott Wave Oscillator
For the oscillator of Elliott waves there are no frames in the face of timeframes. However, do not go to extremes, because the essence of this indicator is only the determination of the strength of the pulse. For simplicity, we assume that for any intersection of level 0 a new cycle will start. As you know, the cycle consists of 8 waves.
The sequence of actions for working with the oscillator of Elliott waves:
- The first wave will be after crossing the histogram level 0. Naturally, this wave can be simultaneously part of another cycle. In the same way, a divergence must occur.
- Since the amplitude of the first Elliott wave is not so high, and the 2 wave is corrective, then the level 0 can be again. In this case, at the beginning of the construction of wave 3 there will be a divergence. If the divergence does not happen, then wave 1 is not selected correctly.
- The end of 3 waves will signify a decrease in the histogram by 30-50% relative to the maximum.
- For the determination of 4 waves, it is necessary that a rollback of at least 90% of the peak of wave 3 occurs on the histogram of the Elliott Wave indicator. Often, a level 0 intersection occurs. It is also important to know that the rollback can not continue in the opposite direction by more than 38 % of wave 3.
- The fifth wave is determined by divergence. It can also be identified if there was an intersection of level 0 on 4 wave. Return after 0 level in this case and there will be a wave start.