Elliott Wave Oscillator Signals by DGT

Elliott Wave Principle, developed by Ralph Nelson Elliott , proposes that the seemingly chaotic behaviour of the different financial markets isn’t actually chaotic. In fact the markets moves in predictable, repetitive cycles or waves and can be measured and forecast using Fibonacci numbers. These waves are a result of influence on investors from outside sources primarily the current psychology of the masses at that given time. Elliott wave predicts that the prices of the a traded currency pair will evolve in waves: five impulsive waves and three corrective waves. Impulsive waves give the main direction of the market expansion and the corrective waves are in the opposite direction (corrective wave occurrences and combination corrective wave occurrences are much higher comparing to impulsive waves)

The Elliott Wave Oscillator ( EWO ) helps identifying where you are in the 5-3 Elliott Waves , mainly the highest/lowest values of the oscillator might indicate a potential bullish / bearish Wave 3. Mathematically expressed, EWO is the difference between a 5-period and 35-period moving average based on the close. In this study instead 35-period, Fibonacci number 34 is implemented for the slow moving average and formula becomes ewo = ema (source, 5) - ema (source, 34)

The application of the Elliott Wave theory in real time trading gets difficult because the charts look messy. This study (EWO-S) simplifies the visualization of EWO and plots labels on probable reversals/corrections. The good part is that all plotting’s are performed on the top of the price chart including a histogram (optional and supported on higher timeframes). Additionally optional Keltner Channels Cloud added to help confirming the price actions.

What to look for:
Plotted labels can be used to follow the Elliott Wave occurrences and most importantly they can be considered as signals for possible trade setup opportunities. Elliott Wave Rules and Fibonacci Retracement /Extensions are suggested to confirm the patters provided by the EWO-S

Trading success is all about following your trading strategy and the indicators should fit within your trading strategy, and not to be traded upon solely

Disclaimer: The script is for informational and educational purposes only. Use of the script does not constitutes professional and/or financial advice. You alone the sole responsibility of evaluating the script output and risks associated with the use of the script. In exchange for using the script, you agree not to hold dgtrd TradingView user liable for any possible claim for damages arising from any decision you make based on use of the script
Release Notes: non-repaint with alert added version
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+2 Reply
dgtrd alexiglegoy
Hi @alexiglegoy, wooow, I am so glad to hear this :-) it is amazing, thanks for sharing your feedback and thanks for your kind offer.
probably coding with mt4 is not much different from pine but never checked it before, and if someday I dive into MetaTrader probably i will enjoy publishing publically :-)
dgtrd alexiglegoy
Hello @alexiglegoy,

Regarding your request to have EWO Signals in mt4, recently I heared about TradingConnector. It apears on @Peter_O 's user status "I auto-execute TradingView Alerts into MT4/MT5 using this: https://www.tradingconnector.com. 1-second delivery"

for your info and wish you continued success
Hi, when i add the indicator to my chart (Forex) i don't see anything...
MDijcks MDijcks
Never mind, i had to adjust "Plotting Length" ;)
dgtrd MDijcks
@MDijcks, hope you enjoy trading with this one ;-)
Looks like it often plots a signal where my market structure is in advance. I must give it a test and perhaps make a new strategy with this implemented.
dgtrd greenmask9
@greenmask9, thanks, please give it a try you can change it to a better version. may be by involving other indicators, you can make this truly nice. without introducing other indicators (expect moving average) and just with the elliott wave oscillator concept the least noisy version, among other tested such as changes in histogram, was to apply smooting. also, try to observe different values of delay input (smooting)
I would appriciate if you could share your test results
@dgtrd, I started by plotting the indicator below the chart. If I find something worth sharing, I will. But it seems there is just too many signals if I look further to the history. And all of them are weak ones
dgtrd greenmask9
@greenmask9, i've weighed the signals by setting a threshold and provided with strong and week signals yet a weak signal might result with a big gain, which I've tried to explain a bit with details below. to automate the indicator's signals with aim to scalp the noisy signals, considering trend indicators, such as dmi, ichimoku cloud, candlestick patterns or bollinger bands could be worth to look

the main idea with ewo-s is to give insight to elliott wave traders by emphasizing the idea that typically wave 3 results with the strongest readings. by practicing and gaining some experience with ewo-s we could be able to distinguish which signal is a good opportunity

in general in impulsive formation,
wave 1, most often starts with a trend reversal.
wave 2, is a correction to wave 1, usually does not reach a new extreme in the counter-trend direction, but will retrace a considerable part of wave 1.
wave 3, the most important aspect of trading using this indicator is remembering that its highest/lowest readings identify a bullish/bearish wave 3 of the swing.
wave 4, is the other correctional wave during the with-trend momentum, thus a second major correction in the ewo-s will most likely be wave 4, usually reverses the oscillator and crosses into the opposite area
wave 5, the price typically reaches a new high during wave 5 and begining of wave 5 could be a week signal since wave 4 correction could be the major correction
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