Introduction to the Elliott Wave Oscillator Indicator
The Elliott Wave Theory is a popular trading theory that is used as a strategy. It is based on the concept of trading based on the pattern of price action oscillations.
The Elliott Wave Oscillator was developed by Ralph Nelson Elliott to help traders objectively observe valid price oscillations in tandem with the Elliott Wave Theory.
What is the Elliott Wave Oscillator Indicator?
The Elliott Wave Oscillator is a popular momentum-based technical indicator which indicates the direction of the trend or momentum, as well as its strength.
This version of the Elliott Wave Oscillator plots positive lime bars to indicate a bullish momentum which is gaining momentum, and positive green bars to indicate a weakening bullish momentum. It also plots negative red bars to indicate a strengthening bearish momentum, and negative maroon bars to indicate a weakening bearish momentum.
This version of the Elliott Wave Oscillator also plots a signal line which is represented by a dashed line oscillating along with the histogram bars.
How the Elliott Wave Oscillator Indicator Works?
The Elliott Wave Oscillator computes for the difference between a five-bar Simple Moving Average (SMA) and a 35-period SMA. It then plots the difference as histogram bars.
The color of the bars would be based on whether the bar is positive or negative, and whether the bar has a higher value compared to its preceding bar.
This version of the Elliott Wave Oscillator computes for the moving average of the histogram bars. It then overlays the moving average over the histogram bars as a dashed signal line.
How to use the Elliott Wave Oscillator Indicator for MT4
Although most Elliott Wave Oscillators have a standard computation, this version allows traders to modify the moving averages used to arrive at the histogram bars. It allows traders to tweak the period used for both the fast and slow moving averages, the type of moving average used, as well as the source of the price data.
It also allows traders to tweak the signal line with its number of periods used, as well as the type of moving average used for the signal line.
The Elliott Wave Oscillator can be used as a trend direction filter based on whether the bars are positive or negative.
It can also be used as a trend reversal signal indicator based on the shifting of the bars from positive to negative or vice versa.
It can also be used as a short-term trend reversal or momentum reversal signal indicator based on the crossing over of the bars and the signal line.
Buy Trade Setup
When to Enter?
Open a buy order on the confluence of a bullish trend reversal setup and the crossing over of the bars above zero. Set the stop loss on the support below the entry candle.
When to Exit?
Close the trade as soon as the bars cross below zero.
Sell Trade Setup
When to Enter?
Open a buy order on the confluence of a bearish trend reversal setup and the crossing over of the bars below zero. Set the stop loss on the resistance above the entry candle.
When to Exit?
Close the trade as soon as the bars cross above zero.
The Elliott Wave Oscillator is a popular oscillator because it is one of the more reliable oscillators available to traders. However, it was developed to help traders identify major price action oscillations. It should be used in confluence with price action based trade setups.
MT4 Indicators – Download Instructions
This is a Metatrader 4 (MT4) indicator and the essence of this technical indicator is to transform the accumulated history data.
This MT4 Indicator provides for an opportunity to detect various peculiarities and patterns in price dynamics which are invisible to the naked eye.
Based on this information, traders can assume further price movement and adjust their strategy accordingly. Click here for MT4 Strategies
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How to install MT4 Indicator?
- Download the mq4 file.
- Copy mq4 file to your Metatrader Directory / experts / indicators /
- Start or restart your Metatrader 4 Client
- Select Chart and Timeframe where you want to test your MT4 indicators
- Search “Custom Indicators” in your Navigator mostly left in your Metatrader 4 Client
- Right click on the mq4 file
- Attach to a chart
- Modify settings or press ok
- And Indicator will be available on your Chart
How to remove MT4 Indicator from your Metatrader Chart?
- Select the Chart where is the Indicator running in your Metatrader 4 Client
- Right click into the Chart
- “Indicators list”
- Select the Indicator and delete
Click here below to download: