This is a simple script which tries to identify Wave 1 and 2 of Impulese Wave and then projects for Wave 3.
Ratios are taken from below link: https://elliottwave-forecast.com/elliott-wave-theory/ - Section 3.1 Impulse
- Wave 2 is 50%, 61.8%, 76.4%, or 85.4% of wave 1 - used for identifying the pattern.
- Wave 3 is 161.8%, 200%, 261.8%, or 323.6% of wave 1-2 - used for setting the targets
Important input parameters
- Length : Length. Keep the numbers low if you are looking for smaller and shorter trades. Keep the numbers high if you are looking for longer and bigger trades.
- Error Percent : Adjustments for ratios as it is not always possible to find exactly equal retracement ratio.
- Entry Percent : Once Wave 2 is formed, entry is set after reversing 30% of wave 2. This number can be increased or decreased. Caution: Keeping the number too low may result in false signals.
- Ignore Trend Direction: If unchecked, it will only look for pattern if Wave 1 has made a higher high. If not, it will ignore Wave 1 condition and only look at wave 1 to 2 ratio.
- Handle Duplicates: Since, the labels are generated upon crossover of entry price, this crossover may happen multiple times. Or sometimes wave 2 can further extend and generate new signal with same wave 1. This parameter says how to handle such cases. Keep Last is set to default and is most preferred option.
- ShowRatios and ShowWaves lets you display wave line and retracement ratios for each
- Default error Percent set to 5
- Added option for waitForConfirmation - this will wait till zigzag pivot is fully formed before considering it for wave
- Added tightstop option which makes use of entryPercent in reverse direction.
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In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in a publication is governed by House Rules. You can favorite it to use it on a chart.