On the board Pretzel Logic's offers for its members some amazing people are gathered. One of them (to say the least) makes great calls and often posts charts to outline them. On no few occasions the GET Oscillator is depicted on his charts (see example). So I figured: let's revisit the ElliottWaveOscillator.
On most platforms the Elliott Wave Oscillator is the difference between a 5-period simple moving average and a 35-period simple moving average. Some platforms use the Fibonacci number 34 instead of 35. The indicator is then depicted below the pricechart as a histogram that oscillates above/below a zero line.
Most tops or bottoms show a divergence between price and the oscillator. A higher price is accompanied by a lower spread in the oscillator, while a lower low in price goes along with a higher low on the oscillator. This signal is especially reliable after the oscillator has pulled back to the zeroline or did cross that line in some extend to the opposite direction as a sign of a countertrend and then turns back in the direction of the larger trend while building the aforementioned divergence.
I made a couple of adjustments to the original indicator provided by TOS:
- percentage difference instead of the standard nominal result (for better historical comparison on long term analysis).
- user definable coloring to the standard settings (sma5 - sma35).
- a 5-period sma smoothed ROC version with coloring (based on the somewhat slower difference between a 10-period sma and a 70-period sma (twice the standard values).
- pricebar coloring (separate thinkscript).
The ElliottWaveOscillator works on every timeframe as it does for every instrument.
Set your coloring to your personal preferences and trading style. For the thinkscipt code see the comment section.
Trade safe!
[UPDATE] EWACS - Elliott WAve Count Support
The combination of the ElliottWaveOscillator and the JK_TA trend or wave analyzer in one package.
BTW, I omitted two small red dots, the smallest ones actually. Any idea where they should have been painted?
Please notice: Choose a setting for the alignment factor (default = 100) at which the histogram oscillates nicely between the top and bottom readings of the trend analyzer. Settings will depend from instrument to instrument and the timeframe of the pricechart.
For JK_TA explanation, see here.