Elliot Wave Indicator
is a powerful VertexFX client side VTL indicator that gives excellent entry and
exit signals. The concept behind the EWO is that the fast moving SMA responds
quicker to price trends compared to the slow moving SMA. When a new uptrend starts,
the fast SMA raises quickly compared to the slow SMA.
As a result, the EWO
rises, thus marking the beginning of a new trend. As the trend stalls, or starts moving
sideways, this difference between the fast SMA and slow SMA starts reducing, and
reaches its peak. This signals the end of the trend. When the trend reverses, the
fast SMA again follows the price, and the difference between the fast SMA and
slow SMA turns negative.
This negative
difference gradually increases and reaches a negative trough when the downtrend
stalls. The same process repeats again
on the next uptrend or downtrend. Hence it is very useful to trade in trending
markets. The difference between the fast SMA and slow SMA also eliminates any
sideways noise and providing clarity in the signal.
The indicator is
presented as a histogram and oscillates around the zero line. At first step, we
calculate the fast moving Simple Moving Average of the Median price for the EWO_PERIOD1
period. In second step, we calculate the slow moving Simple Moving Average of
the Median price for the EWO_PERIOD2 period.
The indicator value is calculated as the
difference between the fast moving SMA and the slow moving SMA.
Buy: Place Buy trade when the EWO indicator
value is below Zero line and rising for two consecutive bars.
Sell: Place Sell trade when the EWO indicator
value is above Zero line and falling for two consecutive bars
To use Elliot Wave Indicator
download it from here, then place it at VertexFX VTL directory:
C:\ProgramData\VertexFX
Client Terminals\"Company name"\VTL10\Local VTL Scripts
Then right click on
the tree and select refresh or restart your client station and you will find under
VTL local scripts in your client terminal.
You can check this
video that talks about Elliot Wave Indicator: