On the other hand, if EWO is both negative and increasing, this is a bearish trend. The near-term trend is bearish and the downtrend is becoming stronger. Once the bars turned bullish, it signaled the start of an uptrend and a good long entry. As shown in the indicator window, the bullish trend continued with a strong initial rise, followed by a brief correction and further increase, presenting a clear buying opportunity for traders.

Elliott Wave Oscillator

They can be used with other forms of technical analysis, including technical indicators. The EWO indicator can also provide early warning of potential market reversals. When the EWO crosses above the zero line, it indicates that the momentum is shifting from bearish to bullish. Conversely, when the EWO crosses below the zero line, it indicates that the momentum is shifting from bullish to bearish.

Elliot Wave Oscillator Indicator MT4 MT5

It is considered  time to exit when any one of these signals breaks down. But here’s the thing—and I can’t stress this enough—don’t trade it in isolation. I’ve seen too many traders get excited about one indicator and forget about the bigger picture.

The Elliott Wave Oscillator (EWO) is a technical analysis indicator that was developed by Ralph Nelson Elliott to determine the strength of the trend and potential price reversal points. The difference between these two moving averages is then plotted as a histogram, with positive values indicating bullish momentum and negative values indicating bearish momentum. Discerning EWO signals is a sophisticated process where traders interpret the convergence and divergence between two moving averages to predict potential market movements.

Momentum

Elliott Wave Oscillator can be a valuable addition to your technical analysis toolbox, offering insights into potential wave dynamics and turning points in the market. The Elliott Wave Oscillator was developed with the objective of helping traders to identify when an Elliott wave ends and when it starts. In simple words, it helps traders to determine when market price movements change directions.

Alligator Oscillator

ForexMT4Indicators.com are a compilation of forex strategies, systems, mt4 indicators, mt5 indicators, technical analysis and fundamental analysis in forex trading. You can also find systems for scalping such as trends, reversals, price actions. Trading on a lower timeframe like 1 minute to long term trading are also imparted here. We aims to be a place where every forex traders can gain resources about trading.

Once the bars turned red, it signaled the start of a downtrend and a good short entry. As seen in the indicator window, the bearish trend continued with a strong initial drop, followed by a brief correction and further decline, presenting a clear selling opportunity for traders. But sometimes I’ll experiment with high/low prices or even volume-weighted prices to see if I get clearer signals. It’s worth testing different sources on historical data to see what clicks with your trading style.

• Just remember to keep it simple, manage your risk, and never stop learning.
• They can be used with other forms of technical analysis, including technical indicators.
• For shorts, EWO should be trending increasingly negative, and the SMA should also be negative.

Developed by Ralph Nelson Elliott, author of the Elliott Wave Theory, the Elliott Wave Oscillator is an indicator used to determine where one Elliott wave ends and the next begins. It aims to offset one of the Elliott Wave Theory’s main weaknesses – reliance on accurate wave counting. You can join a Telegram community and chat with other traders to discuss, share and ask for help. You do not have to use the SMA default settings of 50, 100 and 200, we use the settings below to simply use this indicator to tell us if we should buy or sell. The cTrader Elliott Oscillator works best when the chart has the right number of bars displayed this is usually between 100 to 150. Bill Williams suggests around 100 to 140 bars and Tom Joseph mentions that about 150 is a good number.

Indicator: ElliotWave Oscillator

They identify and predict wave patterns within stock markets and help predict future movement. Overall, the Ewo indicator is a useful tool for traders looking to identify trends and potential market reversals. It is easy to use and can be applied to any chart, making it a valuable addition to any trading strategy. The Elliott Oscillator, or 5/34 Oscillator, is a 34 period simple moving average of prices subtracted from a 5 period simple moving average of prices displayed as a histogram above and below a zero line. You can duplicate the Elliott Wave Oscillator on charting programs with a MACD feature. It can be applied to any time frame (intraday, daily, etc.) and works equally as well in every time frame provided that the correct number of bars are displayed in the chart.

• A downtrend over the recent 5 candles that has not been as strong as over the past 35 candles will stick to the positive field.
• The near-term trend is bearish and the downtrend is becoming stronger.
• The indicator pops up as a simple-to-use buy-and-sell EWO oscillator in a separate chart window.
• In this case we have six trades – 3 shorts and 3 longs, once again marked between the vertical white lines.

How to Add the Elliott Wave Oscillator to Your TradingView Charts​

Remember, successful trading requires a blend of knowledge, experience, and a healthy dose of caution. So, equip yourself with the necessary tools, practice with a demo account, and approach the markets with a well-rounded strategy. Understanding the Elliott Wave Theory allows you to identify potential turning points in the market, which is where the EWO comes into play. A step by step guide to help beginner and profitable traders have a full overview of all the important skills (and what to learn next 😉) to reach profitable trading ASAP. Copyright © 2025 FactSet Research Systems Inc.© 2025 TradingView, Inc. In true TradingView spirit, the creator of this script has made it open-source, so that traders can review and verify its functionality.

Trades are designed to be taken in the direction of the indicator. Namely, this means long trades for positive EWO readings and short trades for negative EWO readings. It must nonetheless be paired with other indicators and ideally other forms of analysis as these indicators are not designed to be used on their own. The Elliott Wave Oscillator uses the basic concept of a moving average crossover to generate trade signals. To trade short, we want the EWO to be not only negative, but increasingly negative.

Whether aiming to craft an adept trading strategy or simply enhance market understanding, the EWO indicator serves as a bridge between wave theory and practical application. Let’s explore how this dynamic technical indicator can illuminate the path of market trends, informing trading Ewo indicator strategies with precision and insight. It is a simple calculation that is based on the difference between a 5-period and 35-period simple moving average. The resulting value is plotted as a histogram, making it easy to identify trends and potential reversals. However, traders should always use caution and not rely solely on the EWO indicator for making trading decisions.