Elliott Waves Indicator

Do you know this fact that if you are not using the Elliot Wave Principle in your forex trading, you are making a mistake. Elliott Waves can be used to help capture the big moves in the market with surgical precision. This wave principle can be used by the day trader, swing traders as well as the position traders in their trading. Elliott Wave Principle has been found to be a universal law of the markets that is applicable to all the markets whether it is the stock market, forex market, commodities market, futures market or whatever. A cycle in Elliott Waves comprises from the bearish to the bullish market or for that matter bullish to the bearish market and it always consists of eight waves. Five of these waves are in the direction of the main trend and are known as the Impulse Waves. The remaining three waves are counter to the main trend and are called Corrective Waves.

Within each cycle there can be sub cycles while at the same time that cycle can be part of another bigger cycle. But all these cycles follow the same 5/3 rule meaning each cycle will have five impulse waves and three corrective waves. Wave One is the start of a new trend while most of the traders and investors are still entrenched in the previous trend. It is the shortest of the five impulse waves. Wave Two is a corrective wave counter to the new trend and indicates profit taking by the traders. Wave Two should not reach the beginning of Wave One. It should stop short of that. Wave Three is the strongest and the longest of the five impulse wave. Wave four is a corrective wave while wave five is again a impulse wave in the direction of the main trend and represents the peak of the bullish or bearish sentiment in the market.

This is very important for you to understand. Elliott Wave Theory works on longer term charts as well as on the intraday charts. It doesn’t matter what timeframe you trade, you can use the wave principle in your trading. So a five wave count on the hourly chart when converted to a weekly chart may only be a one wave count. In the same way, a five wave count on a 5 minutes chart when converted on a daily chart might just compose only one wave. When the currency market is trending upward a 5 wave pattern consists of 3 separate moves upward and 2 separate moves downward before a top occurs.  Meanwhile when the currency market is trending downward a 5 wave pattern consists of 3 separate moves downward and 2 separate moves upward before a bottom occurs. Adding concepts from Elliot Wave Theory is another tool a trader can use to help predict when a currency market bottom or top is nearing. This MT4 Elliott Wave Indicator will also show alerts when signal for Buy or Sell triggered. Parameters, used in the custom indicator:

*ShowAlerts = true – show alert signals;
*ElliotWaves = Blue – color to print elliot waves;

Indicator shipped without source code and Metatrader 4 (MT4) is only supported.