Elliott Wave Oscillator Indicator

Elliott Wave Oscillator Indicator is designed to capture the impulsive moves in the price action. This indicator plot the histogram based on the difference between the long term moving average and short term moving average. By following Elliott wave Oscillator traders can trade in the direction of major trend in the market.

Elliott Wave Oscillator Indicator Overview

Elliott Wave Oscilator Indicator

Five period moving averages are used as short moving average which captures the shorter time frame trend in the market. And thirty five period moving averages is used as long term moving average which capture the longer term  trend of the market. Differences between both of the moving averages are plotted in the form of histogram.

Elliott Wave Oscillator Explaination

If Histogram is above zero, it means difference in moving average is positive and market is in uptrend. If histogram is red, it means difference between the moving averages is negative and market is in downtrend. Traders should take only buy trades when market is in uptrend and sell trades when market is in down trend.

Elliott Wave Oscilator Anatomy

Further two more lines are added on this oscillator, one on the positive side and one on the negative side. Those lines are helpful for creating a filter for the trading setup. Traders should take long trades only when Histogram gives breakout from Filter Lines. Filter Lines allow traders to capture the impulsive price action and at the same time helps to avoid  overtrading in the range bound market.

Elliott Wave Oscillator: Buy conditions

Elliott Wave Oscilator Buy
  • Elliott Wave Histogram should be Blue ie above the Zero Line.
  • Eliott Wave histogram should give breakout from the Filter Line which is above the Zero Level.
  • Traders should take the first buy signal and add positions on late buy entries.
  • Traders should hold the long trade till the time histogram formation is above zer

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Elliott Wave Oscillator: Sell conditions

Elliott Wave Oscilator Sell
  • Elliott Wave Histogram should be in Red ie Below the Zero Line.
  • Elliott Wave histogram should give breakout from the Filter Line Which is below the zero level.
  • Traders should trade the first signal and add positions on late sell entries
  • Traders should hold the short trade till the time histogram formation is below zero

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I have been actively trading stocks and currencies since April 2012. Besides trading with my personal money I am a technical analyst in a mutual fund which has Rs. 1 billion in assets under management. At my leisure, I love attending live music, traveling, and partying with friends.

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