Best Elliott Wave Indicators: Elliot Wave indicators within TradingView offer valuable insights into Elliot Wave Theory by aiding traders in identifying, evaluating, and counting waves within a pattern.

These indicators empower traders to make informed decisions about price movements and profitable trade setups.

In this article, we will explore various types of indicators and how they collaborate with Elliott wave theory to assist traders in analyzing wave patterns.

This analysis helps to spot improved entry and exit opportunities for traders.

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What is Elliott’s Wave Theory?

The Elliott wave theory developed by Ralph Nelson Elliot is a technical analysis tool used to predict the price movement of securities. 

The theory indicates that trends move in repetitive cycles, in which a series of five upward waves which are called impulsive waves, followed by three downward waves which are referred to as corrective waves are formed.

Traders use this theory to identify potential price reversals and trends in the price of a security.

Based on the concept and working of Elliott wave theory there are few indicators available in the trading view platform to easily identify Elliott waves.

Key Features of Elliott Wave Indicator

  • Effective wave counting:- The indicators help traders with accurate real-time wave counting which enables traders to make informed decisions.
  • Identification of 3rd wave:- The indicators recognise the 3rd wave of pattern to enhance the strength and direction of price movement.
  • Past wave analysis:- The indicators help traders review past wave counts and analyse the price movement to predict the market movement.

Elliott Wave Indicators in TradingView

To predict the price movement for a better view of entry or exit opportunities, here is the list of indicators available for easy identification of the impulsive and corrective waves.

  • 3rd wave
  • Zigzag
  • Elliott wave oscillator
  • Elliotwave counter

Best Elliott Wave Indicators #1 – 3rd Wave Indicator

The trading view 3rd wave indicator is a technical analysis tool which is designed to help traders identify potential entry and exit opportunities based on Elliott wave theory. 

The major key benefit of the trading view 3rd wave indicator is its accountability of volumes between 1,2 and 3 waves, based on which the trend strength and entry/exit opportunities can be identified in the price of a security.

The indicator represents a long position in green colour with a dotted target line above it and a red colour indicates a short position with dotted target lines below it.

Best Elliott Wave Indicators - 3rd wave indicator

Best Elliott Wave Indicators #2 – Zigzag Indicator

The ZigZag indicator is a technical analysis tool which helps traders lower random fluctuations and concentrate on larger and more meaningful price movements.

The indicator is plotted by joining the swing highs and swing lows which are greater than a specified percentage by filtering the minor price movements. Hence, the indicator helps traders to spot the trends easily in all time frames.

The ZigZag indicator is used in conjunction with Elliot Wave theory to determine the position of each wave formed in the overall cycle. As securities form different patterns, traders can adjust the indicator settings to fit the pattern of security.

As the indicator doesn’t predict future trends it potentially helps to identify support and resistance zones between the swing highs and swing lows plotted by the indicator. Due to the lagging effect, many traders prefer it to confirm the direction of the trend rather than to identify entry or exit opportunities.

Zigzag indicator image

Best Elliott Wave Indicators #3 – Elliott Wave Oscillator

The Elliott wave oscillator is an indicator which determines the end of an Elliot wave and the beginning of another wave. 

It is also referred to as the 5/34 oscillator, where a 34-period simple moving average(SMA) is subtracted from a 5-period simple moving average(SMA).

When the Elliott wave oscillator is applied to the price chart, a positive and negative histogram is displayed which doesn’t represent any direct entry and exit signals.

It helps to identify potential elliot wave patterns to catch the entry and exit opportunities, a positive histogram suggesting an uptrend and a negative histogram suggesting a downtrend in the security.

To place a long position in security, the Elliott wave oscillator should be increasingly positive rather than only positive for a better reward.

For a short position in security, the Elliott wave oscillator should be increasingly negative rather than only negative for a better reward trade.

Best Elliott Wave Indicators - Elliot Wave Oscillator

Best Elliott Wave Indicators #4 – Elliot Wave Counter

The Elliotwave counter indicator is a popular trading view tool which helps traders in wave counting. This indicator identifies and counts waves in real time by analysing the price data which helps traders to identify potential entry or exit opportunities.

It identifies the start and end points of impulse and corrective waves, labelling them accordingly using numbers and letters. 

If the indicator identifies a complete five-wave impulse pattern then traders can expect a three-wave corrective pattern to set up a trade in the security.

Elliot Wave Counter

Advantages of Elliott Wave Indicators

  • Wave identification and validation:- The indicators automatically identify and count the waves formed in the pattern which helps traders save time and effort. Also, the indicators validate the waves by highlighting price action deviations and corrections.
  • Entry and Exit:- Indicators help traders identify accurate entry and exit points to set up identical trades with better risk-reward ratios.
  • Trade setups:- Indicators’ identification of 3rd wave in the wave pattern signifies strength and profitability in the price movement to set up a trade.

In Closing 

The TradingView platform provides valuable indicators of Elliott wave theory to help traders identify wave patterns with more accuracy and efficiency.

The above-discussed Elliott wave indicators are popular tools to learn and use to set up profitable trades with better risk-reward ratios and can adjust to any settings or time frames based on the trader’s strategy.

As indicators may indicate false signals sometimes, it is advised to use indicators in conjunction with other strategies for confirmed trade setups.

Written By Deepak M

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