Elliott Wave Auto S

🌊 ELLIOTT WAVE AUTO — Automatic Elliott Wave Detection

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📜 THE HISTORY

Ralph Nelson Elliott (1871-1948), an American accountant, spent his forced retirement analyzing 75 years of Dow Jones data... by hand. In 1938, he published "The Wave Principle", revealing that markets move in repetitive patterns of 5 impulse waves followed by 3 corrective waves (A-B-C).

What's often forgotten: Elliott worked primarily on MONTHLY and WEEKLY timeframes. A complete cycle could take months, even years. It was a strategy of PATIENCE, not scalping.

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🎯 OUR APPROACH

This indicator attempts to stay as close as possible to Elliott's original method. The algorithm uses Pivot Point detection (ta.pivothigh / ta.pivotlow) to objectively identify tops and bottoms.

Unlike manual counting where 3 analysts give 3 different results, this method is:

✅ Mathematical — No subjective interpretation
✅ Reproducible — 100 traders = 1 single count
✅ Automatic — Real-time detection
✅ Open source — Nothing hidden, study it freely

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⛔ ORANGE LABELS — INVALIDATIONS

You will sometimes notice ORANGE labels with the ⛔ symbol on your chart. These are not errors! They indicate that a fundamental Elliott rule has been violated, invalidating the current cycle.

Back in his time, Elliott established strict rules to validate a count. If any of these rules is broken, the cycle is no longer valid and we must start looking for a new starting point.

Here are the 3 fundamental rules applied by this indicator:

┌─────────────────────────────────────────────────────────────────┐
│ 📖 RULE 1: Wave 2 NEVER retraces 100% of Wave 1 │
│ │
│ If Wave 2 price exceeds the starting point of Wave 1, │
│ it wasn't a true Wave 1. │
│ → The indicator then reverses the trend (BULL ↔ BEAR) │
└─────────────────────────────────────────────────────────────────┘

┌─────────────────────────────────────────────────────────────────┐
│ 📖 RULE 2: Wave 3 is NEVER the shortest │
│ │
│ Wave 3 is supposed to be the most powerful. If it's shorter │
│ than Wave 1 AND Wave 5, the count is invalid. │
│ → Orange label "5 ⛔" displayed, cycle cancelled │
└─────────────────────────────────────────────────────────────────┘

┌─────────────────────────────────────────────────────────────────┐
│ 📖 RULE 3: Wave 4 NEVER overlaps Wave 1 territory │
│ │
│ In an uptrend: Wave 4 low cannot drop below Wave 1 high. │
│ In a downtrend: Wave 4 high cannot exceed Wave 1 low. │
│ → Orange label "4 ⛔" displayed, cycle cancelled │
└─────────────────────────────────────────────────────────────────┘

💡 These invalidations are NORMAL and part of the method. They ensure that only cycles perfectly respecting Elliott's theory are counted. That's why you'll see few complete cycles — exactly like in Elliott's time.

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📊 HOW TO USE IT

▸ Wave 1: Cycle start detected. Watch, don't act.

▸ Wave 2: Potential ENTRY zone. The retracement is over,
Wave 3 (the most powerful) should follow.

▸ Wave 3: The most powerful! Never trade against a Wave 3.
Let your profits run.

▸ Wave 4: Second potential ENTRY zone for those who missed Wave 2.

▸ Wave 5: Last impulse. Prepare your EXIT.
The impulse cycle is ending.

▸ Waves A-B-C: Correction phase. Patience recommended.
Wait for the end of C for the next cycle.

▸ Orange Label ⛔: Rule violated, cycle invalidated.
The indicator starts looking for a new cycle.

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🔔 TOGGLEABLE ALERTS

Each wave has its own alert, individually toggleable in the settings:

🌊 Wave 1 — Cycle start
🌊 Wave 2 — Potential entry zone
🌊 Wave 3 — The most powerful
🌊 Wave 4 — Potential entry zone
🌊 Wave 5 — Last impulse
🔄 Wave A — Correction start
🔄 Wave B — Corrective bounce
🔄 Wave C — Correction end
✅ Complete cycle

💡 Tip: Enable only the alerts that match your strategy. For example, only "Wave 2" and "Wave 4" for entries, and "Wave 5" for exits.

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📏 SETTINGS

▸ Move Size:
• Small = More signals, more noise (scalping)
• Medium = Balanced (intraday/swing) ← Recommended
• Large = Fewer signals, more reliable (position)

Note: Sensitivity automatically adjusts based on your
timeframe for optimal results.

▸ Labels: Display 1, 2, 3, 4, 5, A, B, C on the chart
▸ Lines: Visually connect the waves
▸ Fibonacci Ratios: Display each wave's ratio (optional)
▸ Label Size: Small / Normal / Large per your preference

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🎨 COLOR CODE

🟢 Green = Bullish trend (BULL)
🔴 Red = Bearish trend (BEAR)
🟣 Pink/Purple = Corrective waves (A, B, C)
🟠 Orange = Invalidation (Elliott rule violated)

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⚠️ DISCLAIMER

Like in Elliott's time, complete 1-2-3-4-5-A-B-C cycles are RARE. This is normal and intentional.

The Elliott Wave method is a patience strategy that rewards those who know how to wait for perfect setups. The many invalidations (orange labels) prove that the indicator strictly respects the original rules.

If you're looking for dozens of signals per day, this method is probably not for you. But if you value quality over quantity, welcome.

Happy trading! 🌊