Elliott Wave Pattern Analyzer

The Elliott Wave Pattern Analyzer indicator automatically detects and visualizes motive Elliott Wave structures, specifically focusing on impulse waves and diagonal formations. It helps traders identify price structures based on classic theory, providing automated wave counts, confidence scores, and Fibonacci-based projections for potential reversals or continuations.

Usage

The tool is designed to identify the start and completion of motive waves. Once a 5-wave structure is detected, the indicator plots the wave count on the chart.

• Impulse Waves: Identified as classic 5-wave motive structures where Wave 3 is typically the longest and Wave 4 does not overlap with Wave 1.
• Diagonal Patterns: Identified by converging trendlines (wedge-shaped) where Wave 4 typically overlaps Wave 1 territory, often signaling trend exhaustion.
• Confidence Scoring: Each detected pattern is assigned a score (0-100%) based on how strictly it adheres to Fibonacci ratios and Elliott Wave rules. Users can set a threshold to filter out low-confidence patterns.
• Projections & Invalidation: Upon completion of Wave 5, the indicator can project Fibonacci retracement levels (0.382, 0.500, 0.618, 0.786) and extension channels. Invalidation levels are also displayed to indicate where the current wave count would be considered void.

Details

The script utilizes pivot point detection to identify structural highs and lows. It evaluates these points against specific rules:

• Wave 2: Cannot retrace more than 100% of Wave 1.
• Wave 3: Cannot be the shortest among Waves 1, 3, and 5.
• Wave 4: In "Strict Mode," it should not overlap Wave 1 territory unless a diagonal pattern is specified.
• Implementation: The script includes an automated cleanup mechanism to manage chart clutter, removing older or invalidated patterns based on user-defined "Pattern Lifetime" or "Max Patterns" settings.

Settings

Impulse Wave Settings

• Impulse Pivot Length: Adjusts the sensitivity of pivot detection (higher values find larger trends).
• Strict Impulse Rules: When enabled, enforces classic Elliott Wave rules without exception.
• Min Wave 3 Extension: Sets the minimum Fibonacci ratio for Wave 3 (default is 1.618).
• Max Wave Retracements: Customizable thresholds for how deep Wave 2 and Wave 4 can retrace.

Diagonal Wave Settings

• Allow Wave 4-1 Overlap: Essential for detecting ending and leading diagonals.
• Extend TrendLine: Projects the boundary lines of the diagonal into the future.

Projection & Visual Settings

• Projection Style: Choose between simple lines or full Fibonacci levels for targets.
• Fibonacci Levels: Define the specific retracement targets displayed after a wave completes.
• Visual Elements: Toggle visibility for wave labels, confidence scores, channels, and invalidation lines.

FAQ

How do I interpret the Confidence Score? The score represents how well the detected structure matches ideal Elliott Wave proportions. A higher score suggests a more "textbook" formation.

Does this indicator repaint? Because the indicator relies on pivot points, signals are confirmed only after the "Pivot Length" number of bars has passed. This is necessary for structural identification.

How can I access this tool? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.