Elliott Wave Turning Points
We were one of the pioneers of computerizing Elliott Wave Analysis. In 1986, we released our initial Elliott Wave research through Advanced GET software which is still used by traders all over the globe today.
Some of the main complaints of Elliott Wave analysis are a) Wave counts tend to change as new market data comes in and thus make it difficult to make real time trading decisions unless you are an expert in Wave analysis and b) the learning curve to become an expert is very steep.
The same team that developed Advanced GET continued to develop and improve our understanding of Elliott wave analysis. Today, almost 30 years since our foray into computerized Elliott Wave analysis, we are proud to present a Forward looking algorithm “EWTP” that identifies tradeable pivots which do not change with new data. The algorithm combines all our knowledge of Elliott Wave, Gann analysis, Fibonacci techniques and price and time projections into one study. The user does not have to learn any of the techniques as it is all utilized within the algorithm as and when needed based on market conditions.
EWTP – Part OneIdentifying pivots
The EWTP (Elliott Wave Turning Point) consist of three parts. The first part identifies potential trade-able pivots on a chart using the Forward looking algorithm. Other than applying the study, there is very little the user has to provide in terms of engagement.
Various types of potential pivots are identified in real time. Once a potential pivot is identified, the software calculates entry zones that will trigger the pivot confirmation along with target levels calculated using Gann and other time and price techniques
EWTP – Part TwoTom’s Strength Levels
The second part of the EWTP solution is our new study called Tom’s Elliott Strength Levels which constantly identify the interaction of various Elliott Wave patterns and provides a single strength level. When the calculated strength level is in a neutral zone, no trends have been identified. When the strength goes above the neutral zone, it indicates up direction with the various levels providing a measurement of the strength. Similarly, if the strength falls below the neutral zone, it indicates a down direction.
The Strength levels are normalized using a proprietary technique allowing easy comparison between the values generated from various time frames. This is very important as it allows proper confirmation techniques with higher time frames (explained below).
EWTP – Part ThreeCross Referencing using Fibonacci Time Frames
This was an important empirical result that came out of our research. Traditionally, traders compare a daily chart to a weekly chart for confirmation. This is to take account of traders using weekly data window to make decisions. However our research has identified several levels of traders in between the daily and weekly data window.
From our research, we found that using a Fibonacci sequence to determine the time window for cross referencing was very effective. The Fibonacci sequence are as follows: 1 2 3 5 8 ….and so on. So if we assign a daily chart as one since it is created using one days of trading, then the next sequence is a 2 day chart that is created by using 2 days of data. Our research shows the Fibonacci sequence to provide the ideal higher time frame for confirmation.